1/ So I watched the >2hr Line Goes Up video on the criticism of NFTs and crypto in general.
It is healthy to address these points and aim to improve the space in general.
Here is a long 🧵of the key arguments. Feel free to leave your counterarguments.
It is healthy to address these points and aim to improve the space in general.
Here is a long 🧵of the key arguments. Feel free to leave your counterarguments.
2/ - Web2 VCs are the same as Web3 VCs
- Crypto doesn’t address banking problems, the problem is human greed
- Bitcoin serves only a few hundred thousand but consumes a lot of energy
- Crypto proposes solutions that no one asks to solve
- Crypto doesn’t address banking problems, the problem is human greed
- Bitcoin serves only a few hundred thousand but consumes a lot of energy
- Crypto proposes solutions that no one asks to solve
3/ - Crypto people do not understand the real-world complex systems, only 1 complicated topic like cryptography and assumes it makes them smart
- PoS: although more energy efficient, are centralized and only claim to be scalable without proof
- PoS: although more energy efficient, are centralized and only claim to be scalable without proof
4/ - PoS rewards the wealthy, are exclusionary (32 Eth), which compounds long-term problems and tend towards centralization
- Hard fork results in vested interests competing and not suitable for an economy
- Hard fork results in vested interests competing and not suitable for an economy
5/ - Blockchain is doing things that can already be done traditionally, like tracking shipping and fraud (not a revolution but standardization)
- Blockchain assumes the world will be on the same chain which is wishful thinking as corporations want to protect against espionage
- Blockchain assumes the world will be on the same chain which is wishful thinking as corporations want to protect against espionage
6/ - Assumes a mechanism between the blockchain and reality above current logistics software
- Intermediaries do not form the large part of fraud, instead it is the bad actors colluding to post fraudulent information at the start, which crypto makes easy
- Intermediaries do not form the large part of fraud, instead it is the bad actors colluding to post fraudulent information at the start, which crypto makes easy
7/ - Lack of tangible things to use them on like currencies, rent or food due to transaction cost
- Gas wars bad
- Coins are too volatile for commerce
- Stablecoins like Tether are not backed by real dollars
- Crypto is reliant on a bigger fool scam aka Ponzi scheme
- Gas wars bad
- Coins are too volatile for commerce
- Stablecoins like Tether are not backed by real dollars
- Crypto is reliant on a bigger fool scam aka Ponzi scheme
8/ - Designed only to reward earliest adopters
- Crypto is a zero-sum game
- Code is law is full of holes
- Crypto is a zero-sum game
- Code is law is full of holes
9/ - NFTs have a disconnect in what they claim vs what they are, of which both are bad
- Financialization of everything = stock market for everything
- No one knows what NFTs actually represent, i.e. copyright, commercial permission, bragging rights
- Financialization of everything = stock market for everything
- No one knows what NFTs actually represent, i.e. copyright, commercial permission, bragging rights
10/ - Some point to a link of an image stored on a centralized server, others point to IPFS-stored images which are still subject to link-rot (only resistant but not eternal)
- Digital scarcity only applies to the token and not the thing itself
- Digital scarcity only applies to the token and not the thing itself
11/ - No cryptographic relationship between the thing and the token, therefore subject to being altered or replaced
- No confirmation of the person selling is the creator
- Fraud occurs at the start and not mid-stream
- Outright art theft and low discernment among NFT space
- No confirmation of the person selling is the creator
- Fraud occurs at the start and not mid-stream
- Outright art theft and low discernment among NFT space
12/ - Revenue from secondary sales come with caveats like royalties being bypassed if used on a marketplace that doesn’t enforce royalties
- NFTs are a closed market dealing in casino chips and new artists pay the expensive minting/listing costs that sit unsold
- NFTs are a closed market dealing in casino chips and new artists pay the expensive minting/listing costs that sit unsold
13/ - Winners are only those who are connected, whales, those who have the attention of the media and the existing holders
- None of it is art, but only speculation and basically a casino (line goes up)
- Expensive PFPs push people to pump their bags and have biased opinions
- None of it is art, but only speculation and basically a casino (line goes up)
- Expensive PFPs push people to pump their bags and have biased opinions
14/ - Community on discord center around money
- Bot spam in discord
- Profile of NFT buyers are: middle-class, socially isolated, responsive to memes, little experience with real businesses, insecure about lack of knowledge, susceptible to flattery and anxious about the future
- Bot spam in discord
- Profile of NFT buyers are: middle-class, socially isolated, responsive to memes, little experience with real businesses, insecure about lack of knowledge, susceptible to flattery and anxious about the future
15/ - Rugs, wash trading and market manipulation are rampant
- The art is bad
- NFT have a mutated venture capital structure
- Successful projects have the same structure as those unsuccessful
- WAGMI culture deceive people to hold
- Problems in code result in re-minting
- The art is bad
- NFT have a mutated venture capital structure
- Successful projects have the same structure as those unsuccessful
- WAGMI culture deceive people to hold
- Problems in code result in re-minting
16/ - MM too complex and require middleware
- MM are a central point of failure
- Victims of scam are left without recourse
- Crypto is pseudonymous and privacy aspect is bad to function as a social network
- Sensitive data leaked are immutable and can be misused
- MM are a central point of failure
- Victims of scam are left without recourse
- Crypto is pseudonymous and privacy aspect is bad to function as a social network
- Sensitive data leaked are immutable and can be misused
17/ - Authentic users expose a lot of information about themselves while bad actors are empowered
- Ethereum is a central platform. A few dozen people signing off on a transaction is meaningless and symbolic with the validation network being a consortium/cartel
- Ethereum is a central platform. A few dozen people signing off on a transaction is meaningless and symbolic with the validation network being a consortium/cartel
18/ - There is no mechanism to compel them to act in the interest of users
- Only the wealthy have justice in the system
- If all games, identity, economic activity, groups you join are in one system, then it is a central system
- Only the wealthy have justice in the system
- If all games, identity, economic activity, groups you join are in one system, then it is a central system
19/ - All web activity can be tracked and Web3 is a dystopia to treat every corner of social existence to money
- Web3 is less accessible, less free, less interesting and more expensive
- Web3 is less accessible, less free, less interesting and more expensive
20/ - Enforcement of ownership can and will be used against users if corporations decide to leverage their power in the space
- There is no reason to believe that users will get true ownership and a likely outcome is products will be locked down even tighter
- There is no reason to believe that users will get true ownership and a likely outcome is products will be locked down even tighter
21/ - Early adopters only assume they will be the ones that have power and set the rules
- Token-gated access are exclusionary
- Rules will not be fairer (DeFi lender who checks if you have donated to a certain cause to grant loans, or if a corporation can track union efforts)
- Token-gated access are exclusionary
- Rules will not be fairer (DeFi lender who checks if you have donated to a certain cause to grant loans, or if a corporation can track union efforts)
22/ - The current system sucks but this is a worse version of that system
- P2E games are expensive and difficult to onboard
- Scholarships function like capitalism and whales get to collect a cut for doing nothing
- P2E games are expensive and difficult to onboard
- Scholarships function like capitalism and whales get to collect a cut for doing nothing
23/ - The psychology moves from playing a game to playing to earn money and treat the game as a job instead of having fun
- Once players earn enough to cover their job, they stop reinvesting and start cashing out
- Once players earn enough to cover their job, they stop reinvesting and start cashing out
24/ - P2E games have an unsustainable economic model propped up by new players only
- Players optimize for money instead of fun
- “There are parts of your digital life you can’t sell now but that’s what they want to change… at every corner, they profit”
- Players optimize for money instead of fun
- “There are parts of your digital life you can’t sell now but that’s what they want to change… at every corner, they profit”
25/ - Things are not contained within 1 chain and the IPFS address can be minted onto a competing or same chain
- If a chain hardforks, which is the real version
- The myth of immutable ownership is predicated on a monolithic victor
- If a chain hardforks, which is the real version
- The myth of immutable ownership is predicated on a monolithic victor
26/ - Things on Ethereum are as trapped as those on Steam
- Duplication glitches will occur and are vulnerable to bad coding when moving tokens from L1 to L2
- The system is slow, difficult to use and generally oblique
- Duplication glitches will occur and are vulnerable to bad coding when moving tokens from L1 to L2
- The system is slow, difficult to use and generally oblique
27/ - Deflationary mechanics = bad unless you are an early adopter as it punishes buying, non-financial assets
- Union busters and gig economy evangelists love crypto as it destroys consumer protection and transfers power to the wealthy
- Union busters and gig economy evangelists love crypto as it destroys consumer protection and transfers power to the wealthy
28/ - Union busters love the prospect of an unbreakable contract whose inequities can be blamed on a machine
- The web started with low complexity and as it became more complex, became out of reach for casual users. Same thing with crypto (e.g. Consensys, Opensea)
- The web started with low complexity and as it became more complex, became out of reach for casual users. Same thing with crypto (e.g. Consensys, Opensea)
29/ - Recreates existing power structures in the new system
- There is no inherent functionality within DAOs and the programming expertise required concentrates power to the hands of a few (same as the FAANGs)
- There is no inherent functionality within DAOs and the programming expertise required concentrates power to the hands of a few (same as the FAANGs)
30/ - DAOs are very susceptible to exploits and proportional to the assets kept on chain
- Reference to old DAO hack and hardfork to roll back and protect the wealthy
- Decentralization is a myth and the people who build are in charge with a kill switch in their back pocket
- Reference to old DAO hack and hardfork to roll back and protect the wealthy
- Decentralization is a myth and the people who build are in charge with a kill switch in their back pocket
31/ - What if someone with legitimate stake spams DAO with bad requests
- What if not enough people participate in voting
- What if the system locks itself up(?)
- What if the rules are rigged
- What if the system commits a crime
- What if someone with an important role dies
- What if not enough people participate in voting
- What if the system locks itself up(?)
- What if the rules are rigged
- What if the system commits a crime
- What if someone with an important role dies
32/ - You can build contingencies but you also need contingencies for contingencies
- What if someone used systems for dealing with the deceased/absent to expel people they don’t like
- Organizations are too complex to express in code
- What if someone used systems for dealing with the deceased/absent to expel people they don’t like
- Organizations are too complex to express in code
33/ - Once DAO action moves offchain, the DAO is powerless
- Voting mechanism leads to concentration of political power over time
- Voters are incentivized not to vote against the whales. If you spend tokens = less staked = less future tokens = less future voting power
- Voting mechanism leads to concentration of political power over time
- Voters are incentivized not to vote against the whales. If you spend tokens = less staked = less future tokens = less future voting power
34/ - Ultimately DAOs only benefit the creators and the exchange that sells it
- The core of web3 is the wealthy vs the ultra-wealthy
- The driving force is economic disparity and the blindspot of casual critics
- The core of web3 is the wealthy vs the ultra-wealthy
- The driving force is economic disparity and the blindspot of casual critics
35/ - It draws in the bottom who feel the opportunities and system closing around them, isolated by social media and the pandemic
- The conclusion of crypto people was that capitalism didn’t provide enough opportunities to be the boot and if you buy in now, you can be the boot
- The conclusion of crypto people was that capitalism didn’t provide enough opportunities to be the boot and if you buy in now, you can be the boot
36/ - The system turns everyone into petty digital landlords, distills all interaction into transactions and determines value by how sellable it is
- A different system is not a better system
- We replaced a bad system of work with terrible apps, gigs, and on-demand labor
- A different system is not a better system
- We replaced a bad system of work with terrible apps, gigs, and on-demand labor
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