NFTs Big Problem What Are They

NFTs Big Problem What Are They

NFTs Big Problem What Are They

NFTs Explained And Their Problems

NFTs are explained in an entertaining way along with the drawbacks to NFTs

NFTs Big Problem What Are They

NFTs Explained – The BIG Problem.

2,757,391 viewsFeb 2, 2022 


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NFTs Big Problem What Are They


NFTs Big Problem What Are They


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00:00did you know that thanks to nfts people00:02have managed to sell a recording of them00:03farting for over 400 a picture of homer00:06simpson combined with pepe the frog for00:08320 00000:10and even a simple five word tweet for00:122.9 million dollars in my entire 1100:15years of making youtube videos i have00:17not seen a single trend catch on in the00:19way that nfts are doing right now so00:22here’s what the fuss is all about why00:24nfts are both a phenomenal invention and00:26becoming a problem and then the right00:28way to invest in nfts i’m even gonna00:31unbox one myself00:32so00:33it starts with this the way that our00:35economy has always worked is we earn00:37money and then we use that money to buy00:39goods but the more time that we’re00:41spending on digital apps like instagram00:43and the more time we’re spending on00:44digital games like fortnite the more our00:46purchases are shifting away from00:48physical goods00:50and more towards digital goods but that00:53poses a problem digital goods are harder00:55to monetize like let’s say that i make a00:58beautiful physical painting and i try to01:00sell it to people at a market now even01:02if someone tries to copy my painting or01:04even if they go as far as to take a01:06photo and then make a print of my design01:08it doesn’t really affect me too badly01:11because you’ll be able to tell from the01:12brush strokes that i have the original01:16but if i was a digital artist who01:17painted that same piece on my ipad for01:19example then the second i released that01:21art publicly as a jpeg image i would01:24lose almost all control over that asset01:26it can be copied with something as01:27simple as a right click and those copies01:30will look 100 identical to my original01:33so my art will no longer be a scarce01:35resource and thus its value drops01:37dramatically01:39this is what nfts are trying to change01:41see the word itself stands for01:42non-fungible token if something is01:45fungible it means it’s interchangeable01:48like cash where your ten dollar note can01:50be completely interchanged with my ten01:52dollar note01:55and so if something is non-fungible it01:57means it cannot be interchanged nfts are01:59using blockchain technology to be able02:01to indisputably verify who has the02:03original of a digital product there are02:06a one-of-a-kind token of ownership that02:09has a value and so when people are02:11buying and selling nfts what they’re02:13really doing is buying and selling their02:15virtual ownership over something02:17and to be honest there are five distinct02:19advantages to these tokens like if02:22you’re a designer you’ve got a new way02:23to earn and for fans of your art they’ve02:25got a new way of supporting you instead02:27of just transferring you a donation by02:29paypal they’re actually getting a piece02:31of your history in exchange nfts put an02:34end to really long-written boring02:36contracts replacing them with smart02:37contracts which in a really streamlined02:40way define the rules by which the nft02:42operates so for example a designer can02:44set a rule such that every time their02:46item is bought or sold they get a 20 cut02:50nfts are a dream for a lot of collectors02:53i get the fact that they don’t really do02:55anything might sound kind of dumb but02:57there are plenty of people who gain02:58pleasure just from knowing that they03:00have something rare i mean just think of03:02trading cards why did this charizard03:04pokemon card sell for 220 00003:07it wasn’t because it was good at03:08battling it’s just hard to find and so03:11through nfts the fact that you can be03:13the sole owner of the token for a03:15digital piece authenticated via a system03:17that’s completely fraud proof03:19you can see how it might give collectors03:21a similar thrill03:22and then four it’s not just creators03:25anyone can make money off nfts because03:27they can be traded each nft has a market03:30value and we’ve seen plenty of cases03:32like the one of this crypto punk face03:34over here which was originally bought03:35for less than 3003:37and has recently sold for 11.75 million03:40and i guess even more importantly is03:42that the nft market is seen as a fairly03:44accessible place to invest it’s not like03:46the stock market which can be03:47intimidating for a lot of people and03:49it’s not like the housing market where03:50you might need hundreds of thousands of03:52dollars to just get started and then03:54finally nfts give people a sense of03:56belonging i think a big part of why03:58people buy them is to feel like they’re04:00in a club for example there’s one04:02collection of nfts called the board ape04:04yacht club 10 000 unique ape images04:07for which the cheapest one is actually04:08going for over 200 000 right now but the04:11point is you’ll regularly find that the04:12people who own these nfts will use these04:15photos everywhere kind of like a symbol04:17of pride that they’re part of this04:18exclusive group and then on top of that04:20the creators of this board ape yacht04:22club they even organize physical04:24get-togethers for people who own board04:26ape nfts although this is the exception04:29more than the rule though04:30but this leads me on to the problem04:33the extremely problematic problem and04:36hey if you are finding this useful then04:37a sub to the channel would be04:39fun04:40to i totally believe in the core04:43technologies and the potential benefits04:45of vanities but the more i’ve learned04:47about how they’re actually being used04:49the more i’m genuinely scared about04:51what’s to come so just to start with04:53nfts are not what a lot of people think04:55they are if you own the nft of a piece04:58of work whilst you do have ownership05:00you’re still not the owner having an nft05:03of something isn’t giving you rights05:04over that design it doesn’t mean you can05:06then start printing t-shirts with it on05:08and selling them all it does is just05:10proves that it’s your property but just05:13through one specific way of measuring05:15what counts as your property usually for05:16a little more than bragging rights so05:19this is pretty much what you can expect05:20your nft unboxing experience to look05:22like you’ve got a nice shiny box and uh05:25[Music]05:26nothing05:27and even though nfts may have started05:30out being all about respecting the05:31artists as of right now the majority of05:34them are not being made by the lone05:35creator pouring their heart and soul05:37into their work they’re actually being05:39made by opportunistic business people05:41who just see them as a very quick way of05:43making money like just as an example05:45take the lazy lions another collection05:48of 10 000 unique unbelievably expensive05:50avatars just as ugly as the apes but now05:53in lion form and if you look closely at05:55this collection you’ll start to notice05:57something that certain facial features06:00keep reappearing and that’s because lazy06:02lions are not the work of a passionate06:04individual who’s genuinely trying to06:06design creatures with real character06:08their mass-produced computer-generated06:11cash grabs someone has realized that nft06:13apes are selling like crazy so they’ve06:15just picked another animal drawn 50 or06:17so individual pieces and then used a06:19simple piece of code that says make me06:2110 000 unique avatars using a06:23combination of these pieces there’s no06:25soul here at all it’s just how do we06:28take advantage of this trend to make06:30piles of cash or another example one of06:33the most ridiculous concepts i’ve seen06:35people talk about recently is this idea06:37of buying digital land there’s a real06:40site you can go to called next earth06:41who’ve mapped out the entire planet and06:43for the right price will allow you to06:45buy any area of land you want and no06:48joke hundreds of thousands of people06:49have swarmed to this platform with the06:51simple logic that well physical land is06:53worth so much now and if the world is06:55moving digital then digital land is06:57going to be worth loads06:59right07:00but07:01they’re forgetting a very simple fact07:03physical land has a purpose you might07:05want to live there you might want to set07:06up a factory or a server what exactly am07:09i going to do with my digital land go07:12online camping07:13it doesn’t make any sense and i mean07:16these next earth people07:18who are they do they own the earth is it07:20really in their power to sell other07:22people’s plots of land07:24no anyone can set up one of these07:26platforms as a matter of fact there are07:28already loads of them and so if you’re07:30buying let’s say the taj mahal on next07:32earth which by the way would cost me07:34close to twenty thousand dollars that07:36doesn’t mean you own the taj mahal it07:37doesn’t mean you even virtually own the07:39taj mahal all it means is that you have07:41a token that proves it’s your property07:44on one of these unlimited number of07:46platforms it’s the literal equivalent of07:48paying an entire year’s worth of savings07:50to buy land in a video game except07:55it’s not even a game07:56and things get far worse when you see07:58the way that some celebrities have used08:00and been used by08:02nfts twitter is full of thousands of08:05famous people dropping nfts left right08:07and center offering incentives to fans08:09who buy the super expensive ones like08:11getting to meet them for example and08:13that might sound fine but you can tell08:15that it’s coming from a place of just08:17trying to cash in almost all of these08:19celebrity nfts are little more than just08:21repurposed photographs from the past and08:23the perks that come with them are really08:25things that should be worth hundreds but08:27through the current hype of nfts they’re08:29trying to get fans to pay tens of08:31thousands for08:32but this is nothing compared to what i08:34saw the other week so stan lee the now08:37deceased creator of marvel apparently08:40came back from the dead08:42to promote an nft collection and at this08:45point it is just sad this guy died in08:482018. i highly doubt his final words08:50were please sell this stupidly expensive08:52set of jpeg images to extort my closest08:55fans people are trying to use nfts to08:57get rich off the fact that he’s dead and09:00they’re always trying to make it seem09:01like because stan lee loved embracing09:04new tech that this is what he would have09:06wanted09:07yeah fun fact stanley also loved charity09:10to the point where he set up his own09:11foundation how about raising money for09:13that it would definitely be a better way09:15of preserving his legacy that’s for sure09:18the exact same thing happened with the09:19painter bob ross he was known as the guy09:22who inspired the joy of painting with09:24his beautiful sweeping landscape art and09:26would you believe it his legacy is now09:28being honored with09:30well09:32this by the funko figure company and to09:35be honest i think this goes against09:37everything the guy stood for the company09:39claims his legacy was about investing in09:40paintings no it wasn’t he wanted people09:43to buy paint and make the art he would09:45openly say that he didn’t want his name09:47to be used for mindless generation of09:49profit and yet after his death they’re09:51using every bit of goodwill that his09:52name had left to effectively print money09:55and most importantly he was a huge fan09:58of nature and the environment and nfts10:01are not helping that and this is my next10:04thing10:04so you might know that there’s a whole10:06load of different cryptocurrencies that10:08you can own there’s bitcoin litecoin10:10ethereum well almost all nft10:13transactions are made using ethereum and10:15ethereum is pretty bad for the10:17environment it uses a security mechanism10:19called proof of work which is incredibly10:22thorough and is a big part of what makes10:24nfts so fraud proof but the problem is10:26that this kind of security requires a10:28lot of computers around the world to be10:30contributing their power to this network10:32and that uses a lot of energy10:35however10:36there’s an even more fundamental10:38question around nfts as you’ve seen10:40they’re basically just a way to create10:42artificial scarcity for something to10:44make something that was previously10:45unlimited10:46limited but in the vast majority of10:49cases is that really a good thing i’ll10:51give you an example so a few months ago10:53the gaming company ubisoft came out with10:55a brand new scheme ubisoft quartz10:58they’re telling players that in their10:59future titles they’ll be able to earn11:01one-of-a-kind in-game items that are11:03also tradable nfts and you could say11:06well that’s great that gives me11:08something really tangible to aim for11:09while playing and that’s awesome i can11:12sell that nft for money because it is a11:14completely unique item that no one else11:16will have11:17but if you think about it there’s two11:19possible outcomes here either these nft11:21items are really limited and they do11:23become valuable at which point you’re11:25basically dangling a carrot in front of11:27millions of players to encourage them to11:29play for an unhealthy amount of time11:32just for a chance to win and making the11:34games less inclusive and fun for the11:36people who can’t afford to do that now11:39the other alternative situation is if11:40there’s tons of these nft items to go11:42around for everyone and they’re all kind11:44of similar just with one slight unique11:46change which i think will be the more11:47likely outcome but then the nft aspect11:50of it becomes meaningless now i get that11:53there’s a brag factor of owning an nft11:55for let’s say an in-game weapon and if11:57this nft made you the owner of that11:59weapon and it meant that you could take12:01that weapon from this game to the next12:03game and still keep ownership of it12:06that’s a legitimate value add12:09but it won’t do that as much as12:10companies try to make it seem like it12:12owning an nft is not like owning a12:14physical product if i own a real hoodie12:16i can wear that hoodie at home i can12:18wear that hoodie while playing sports i12:20can wear that hoodie on holiday but the12:22complex nature of different games using12:24different engines and physics systems12:25and bases of code means that there’s no12:27way in hell that i’d be able to take my12:29gun that i earned from playing ten12:31thousand hours of one call of duty game12:32for example into the next call of duty12:34game it’s value will live and die in the12:37game that i’ve earned it from just like12:40if it wasn’t an nft item and was just a12:42normal in-game one the reason it’s an12:44nft is just so that ubisoft can make12:46more money by taking a percentage cut12:48every time the nft is bought and sold12:50and it’s not just unethical tactics nfts12:53are also riddled right now with illegal12:55activity for every nft you see from a12:57legitimate artist you’ll find 10 from12:59people who’ve never made a drawing in13:01their entire life and who’ve basically13:03just taken an already copyrighted piece13:05of work and tokenized it maybe13:07pixelating it on the way to try and sell13:09it off as retro art like i found a13:11marvel collection the other day where13:13you can buy a one-of-a-kind superhero13:15from the avengers there’s only one of13:17each and so you can end up paying the13:19equivalent of three million dollars just13:21for one character13:22except13:24marvel didn’t make these these aren’t13:26officially licensed products so if i13:28actually bought this gif for three13:30million dollars not only would i be13:32immediately bankrupt but i would also be13:34breaking copyright infringement law13:36all that said if you do still want to13:38buy nfts but just have no idea where to13:40start this is not financial advice by13:42the way but13:44this is the way i look at it i think13:46that for a lot of nfts right now the13:48majority of their perceived value is13:49coming from the technology they’re based13:51on as opposed to what they actually are13:54i think people are buying these nfts13:55because they’re trending right now and13:57because there’s a good chance that the13:59future of web and the potential14:00metaverse we’re moving towards we’ll use14:02this technology to be able to prove who14:04owns what digital goods but in the exact14:07same way that it’s difficult to transfer14:09an in-game item from one game to the14:10next game i think there’s an extremely14:13slim chance that any nft you own now14:15will still have a use at all in these14:17theoretical future worlds there will14:19likely be a point soon where nfts are14:21not trending people might get bored14:23there might be a next thing they move on14:24to these nfts of jpeg images might just14:27reach a saturation point because of the14:29sheer amount of people making them right14:30now and assuming that that does happen14:33at some point all of that value that’s14:35coming from the cool factor that14:37speculative perception of what an nft14:39should be worth just because it is an14:40nft will fall by the wayside and you14:43will be left with your virtual ownership14:45of a jpeg image so as of right now i am14:48personally staying well away people do14:51make money off nfts don’t get me wrong14:53but the sheer volatility of them makes14:55buying them right now much more akin to14:57gambling than investing what most art15:00experts would say is buy an nft if you15:03like a piece of art and you specifically15:04want to support that artist if you’re15:06going to buy something buy something15:08that if the whole market crashed15:09tomorrow you’d still be glad to own as15:11it made you a part of that community and15:13that history15:15but seriously i mean in an age where you15:17can literally pay someone 20 on fiverr15:19to design any art that you want and then15:21the art actually belongs to you as15:23opposed to paying 20 million just to be15:25able to say that you have technical15:27ownership but not even be the real owner15:29of a piece of art that is just one of15:31ten thousand similar pieces15:33this nft craze definitely feels like a15:35bubble that is about to pop15:38now while i don’t necessarily think that15:40nfts are the right thing to shop for15:42right now if you are just generally15:44finding yourself shopping online more15:45and more recently i’ve just found the15:47perfect tool for you karma this video15:49sponsor for those of you who don’t know15:51karma is a free app and browser15:52extension that ensures that you never15:54miss a price drop or coupon code when15:56shopping online i’ve actually just used15:58it to get this fancy ergonomic keyboard16:00that fixes some wrist strain i’ve been16:02having karma alerted me that the16:03keyboard was on sale and was running 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