Non-fungible tokens for dummies

The Register has a report on Bill Gate’s views on Non-fungible tokens (NFTs) and the related cryptocurrencies. The short version is that both are “100 percent based on the greater fool theory.”

Nothing surprising there: they are. But the article also includes a handy explainer as to what Non-fungible tokens actually are. It is such a superb piece of writing that I am posting it here so that I can refer back to it as and when necessary.

Want to buy nothing? You’d probably say no. That’s because people don’t like nothing, they like scarcity and status. In the digital world, scarcity doesn’t work because data can be infinitely replicated.

But what if I faked digital scarcity? A database with limited spaces, each identified by a unique number. Think a line of people queuing for nothing. There’s no value inherent in one spot over another, but I sell you a position in the queue. I’m not selling you the queue, or its destination (there isn’t one), just the right to stand in this particular position.

You give me a dollar, and I give you some paper work, signed by yours truly, that says you have the right to stand there. Your position in the queue combined with my paper is a token that can’t be recreated. There is only one of each position. It is, therefore, “non-fungible.” The blockchain checks every single sale of a queue position and once you’ve bought your spot, it’s listed on the blockchain. Want to sell your position to someone else? You can, and that transaction will be listed on the blockchain too.

Why would anyone want a spot in my queue? Well, what if I put up a poster next to your position? Every spot now has a unique poster, and buying a place in the queue means you can now stand next to that poster. You don’t own the poster, you don’t own the image on the poster, you can’t reproduce the image, or sell copies, or claim any other type of ownership. What you’ve bought is the right to stand next to that poster – that’s it. You can show your friends the receipt that says you can stand there. They might even think it’s cool.

Congratulations, you now understand NFTs. Yes, it really is that stupid.

Dopamine Coins

Cryptocurrencies, such as bitcoin, as well as the underlying blockchain technology, are things about which I have long been cynical. As far as I can see, they have no value, no purpose and no point other than providing yet another economic bubble, profitable for those that get out fast enough but disastrous for the schmucks left holding the things when prices crash.

Then again, I’m quite cynical about most new things — I thought podcasts were a stupid idea when I first saw someone attach an audio file to a blog, and look at how popular podcasts are now. So I have largely ignored all of the cryptohype on the grounds that, if my cynicism turns out to be misplaced I’m sure I’ll find out soon enough.

However, as the reporting around these things increases, the more sure I am becoming that my cynicism was not misplaced. Indeed, if anything I probably haven’t been cynical enough.

Let’s start with the news that triggered this post, that One bitcoin transaction emits as much CO2 as a household in 3 weeks. I have long been aware that the cost of generating cryptoassets is eye-wateringly high, but it is useful to have some sense of just how much of an energy cost we are talking about. And it needs to kept in mind that this cost is in pursuit of generating something that has no use and no intrinsic value.

But you can trade them. In fact, the only thing you can do with these things is trade them. Which brings me to the second article I stumbled across recently: ‘Trading is gambling, no doubt about it’ – how cryptocurrency dealing fuels addiction.

I don’t have a very high opinion of financial trades or financial traders, but the exchanges that support this do have to comply with various regulations which — in theory, at least — provide some protection. Even casinos have to deal with a level of regulatory oversight, but not cryptoassets:

While some trading platforms that offer digital assets are regulated – because they also offer more traditional financial instruments – crypto coins and tokens are not.

Cryptoasset executives do not have to prove that they are fit and proper people to take people’s money. The companies they run are not required to hold enough cash to repay investors if they go bust. Nor must they worry about the FCA’s stipulation that financial promotions, such as those splashed across public transport in London, are fair, clear and not misleading.

If you get involved in cryptotrading, you are essentially handing large sums of money over to someone who, even if they aren’t actively trying to defraud you, will often prove to be unable to provide anything close to adequate protection. These exchanges are, all too often, being run by amateurs who lack necessary knowledge or skills and who wouldn’t be allowed anywhere near your money if real assets were involved.

Of course, the supporters of blockchain technologies will respond to these issues by claiming that these are just teething issues to be resolved, or some handwavy stuff about new or “disruptive” technologies needing time to prove themselves. But, as Molly White points out, It’s not still the early days.

Bitcoin has been around since 2009, other blockchain-based currencies and applications have similarly long pedigrees. This is plenty of time for any issues to have been worked out and plenty of time, if these things did have any value, for that value to become apparent.

The more you think about it, the more “it’s early days!” begins to sound like the desperate protestations of people with too much money sunk into a pyramid scheme, hoping they can bag a few more suckers and get out with their cash before the whole thing comes crashing down.

Blockchain is a solution in search of a problem. It’s had long enough, and it’s now safe to assume that there are no problems for which blockchain is solution. It’s a technology that needs to be abandoned, sooner rather than later.

Unfriended

So here’s a bit of news from Australia, where legislation has been published to make Google and Facebook pay news publishers. The main response to this has been from Facebook who decided to show their displeasure and, presumably convince everyone that they are too important for legislators, by blocking links to news websites in the country.

This didn’t go quite to plan:

But when Facebook implemented its ban, an online bookstore, charities, and even a domestic violence support service saw their Facebook presences erased. Australia’s national Basketball and Rugby bodies also saw their pages sent to the sin bin.

According to Facebook, this is because the law doesn’t spell out clearly enough, for them, what is news and what isn’t.

This leaves Facebook in the interesting position of telling advertisers it offers superior micro-targeting services, while telling the world it is unable to tell the difference between a newspaper and a bookshop.

When I saw this story, I was close to posting the above quote and leaving it at that. But then I read on and, while the reporter notes that:

Having woken up to a news-free Facebook, your Australia-based correspondent can report that that sky has not fallen in and it remains possible to be well-informed and entertained down under.

Which is as it should be. Facebook, ultimately, is just a website and one that I have been quite happy to ignore since I deleted my account in 2012.

But then there’s this:

I’ve seen other complaining that they liked Facebook as a news aggregator and miss that aspect of its service but will instead visit actual media websites even if that’s a bit fiddly.

Apologies in advance to anyone reading this who gets their news from Facebook, but this is madness.

Facebook uses an algorithm to determine what to show you. Obviously, I have no insight into how this algorithm works — which is a problem in itself — but we do know that it tends to simply deliver more of the same, dragging users of the Zuckerweb into ever more polarised echo chambers.

There is a better alternative. It’s called RSS.

This is a technology that saw it’s heyday in the first decade of the 21st century and allows you to aggregate all of the content, across the web, that you want to see. You would visit a website, add their RSS feed to your preferred reader and, from then on, all of their content is delivered straight to you. It really is that simple.

RSS has fallen out of favour somewhat with the rise of social media and its algorithmic timelines took hold, even though the technology itself still underpins much of the modern web. I still use it, however, and I honestly don’t know how I would manage without it. I can see what I want, when I want, and organised how I want.

So, rather than having to constantly keep up with the latest online drama, I can take twenty minutes, two or three times a day, to check up on issues and subjects that interest and concern me. And then I can go back to focussing on whatever else I’m supposed to be doing.

Although RSS has fallen out of favour, it hasn’t gone away. Many news sites, most blogs and many other sites continue to deliver RSS feeds. The Guardian, for example, offers a feed not only for the site as a whole, but also a separate feed for every individual writer and subject. And, of course, there are still plenty of aggregators out there.

I have been happily using NewsBlur since Google Reader was killed off, but many other options are available.

Quote of the day: Amplifying the addiction

When I started working in technology, my hope was to build products that brought people together in new and productive ways. I wanted to improve the world we all lived in.

Instead, the social media services that I and others have built over the past 15 years have served to tear people apart with alarming speed and intensity. At the very least, we have eroded our collective understanding—at worst, I fear we are pushing ourselves to the brink of a civil war.

— Tim Kendall, Facebook’s former director of monetization in a testimony (PDF) to the US House of Representatives.

Via The Register.

Facebook threatens to stop spreading conspiracy theories if they can’t spy on their users

Back in July, the court of justice of the European Union ruled that companies like Facebook could be prevented from sending data back to the US because they don’t have enough protections against snooping by US intelligence agencies.

The ruling didn’t immediately end all transfers, but does place a requirement on national data protection authorities to vet the sending of any new data to ensure that any personal data complies EU’s GDPR data protection rules.

And so to Ireland, where Facebook’s European operation is located and, therefore, responsible for enforcing this rule.

On Tuesday Facebook tried to strong-arm the Irish data protection commissioner by threatening to pull out of Europe if forced to comply with the law.

We live in hope.

I was going to go on a rant here, but then I noticed that the satirists at NewsThump have already been there: Facebook threatens Europe with fair elections decided by well-informed voters. What a prospect.

Of course, they’re bluffing and, by Wednesday Nick Clegg, Facebook’s vice president for justifying Zuckerberg’s tantrums, and former UK deputy prime minister1 was frantically backpedalling.

I find his arguments (as reported) more than a little disingenuous. He’s eliding personal data (which is covered by the GDPR) and data in general (which isn’t) and claiming that having to keep up with ever changing rules (they aren’t) is impossible (it isn’t).

Realistically, Facebook isn’t going to go anywhere. They might thrash around for a bit but, ultimately, there is too much money in spreading hate speach and algorithmically promoting conspiracy theories and the Zuckerborg will comply with whatever rules are imposed.

But imagine being able to go online without being endlessly monitored, and not having ever more extreme content pushed at you.

The technology exists. It’s called RSS and Daniel Miessler thinks that it’s time to get back into RSS. Personally, I never stopped using RSS — my reader of choice is Newsblur — and I can’t imagine not having a single place to find pretty much everything I have chosen to read or watch online.

Footnote

  1. Of course Liberal politicians end up working for surveillance capitalists. It’s 2020.

Quote of the day: Prejudice engines

In the schools fiasco, the exam authorities, such as Ofqual in England and the Scottish Qualifications Authority, were apparently told that the primary concern was to prevent grade inflation. Once politicians had made that choice, then blaming the algorithm for producing the wrong political answer is little more than refusing to accept responsibility for one’s judgment.

Kenan Malik

Five Things #13

The Devil Buys Us Cheap and the Devil Buys in Bulk by M. Bennardo is a morality tale about unearned money.

Helen Claire Hart argues that we should lift the ban on asylum seekers seeking work.

Kieren McCarthy at The Register looks at the creative accounting that helps Apple get away with charging an unjustifiable mark-up on repairs while also claiming to make a loss.

Funk’s House of Geekery looks back at Tank Girl, the movie.

Susan D’Agostino talks to Barbara Liskov, the architect of modern algorithms.

Another Five Things

It isn’t easy being a troll. Hand Me Downs is a short story by Maria Haskins.

“We Handed A Loaded Weapon To 4-Year-Olds.” Developer Chris Wetherell built Twitter’s retweet button. He tells Buzzfeed why he regrets what he did to this day.

Rosie Fletcher at Den of Geek suggests the 2 hour 45 minute running time for It Chapter Two indicates that the horror genre is moving into the mainstream. And that’s a good thing.

Over at Aeon, Matthew Stanley recounts British astronomer and physicist, Sir Arthur Stanley Eddington’s attempt to test Einstein’s theory of relativity. It’s worth reading not just for the challenges Stanley faced, but also the way in which he managed to craft the subsequent narrative into a symbol of post-war German-British solidarity.

And finally, Alastair Campbell has left the Labour Party and asked Jeremy Corbyn to seriously consider whether he’s really up to the challenges ahead.