Many of you have wondered, why collect stamps, buy expensive paintings at auctions, or own cars that may never leave the garage?
The same question can be asked of those who buy NFTs. For example, some are driven by a collecting interest—they enjoy collecting uniqu e digital items. Another category of buyers sees this as excitement, similar to sports – for them it is a kind of game.
Another common reason is the desire to increase one’s status in a narrow circle of people by purchasing an exclusive token. For some, the feeling of belonging to the author of a work of art or a celebrity is important. For some, buying NFTs is a tribute to fashion and a desire to keep up with modern trends.
And, of course, NFTs could be another way for very wealthy people who already have everything to spend big money.
This and much more will be commented on by Vladimir Okhotnikov — the author of analytical articles. Vladimir is always interesting to read. First, he skillfully connects complex technology concepts with practical financial applications. Secondly, his material is distinguished by a deep study of the topics under consideration. The author analyzes in detail the economic, legal and social aspects of new technologies. Thanks to this, readers always find in his words a relevant and insightful analysis of the latest trends.
“I recently came across an interesting article entitled ‘Why 2024 Will Be Like Nineteen Eighty-Four’, which was written in 2009. It discussed the issue of Amazon randomly deleting books from some users’ Kindle devices. The author described how Amazon removed George Orwell’s ‘1984’ and ‘Animal Farm’ from the Kindle, citing a publishing error. The article also analyzed the legal differences between purchasing a paper and an electronic book. I found it interesting that Kindle users are forced to ‘unconditionally agree to Amazon’s terms and conditions’, which allow the company to make changes and remove content even if money has been paid for the product,” as told by Vladimir Okhotnikov.
We also found it interesting when they described the moment when technical means of protection appeared that did not allow content to be arbitrarily changed or deleted without the knowledge of the owner. Let us remember that the original article that Vladimir read was written 15 years ago, that is, long before the advent of blockchain and NFTs.
According to Vladimir Okhotnikov, he especially remembered the lines of the author of that very article, in which he said that:
“In the future, where books will exist exclusively in electronic format on servers, court decisions will lead to the complete disappearance of literary works.”
Indeed, we live in a world where gadgets that are both ours and not ours are under our control, but managed by remote companies on demand.
Most of the digital content you purchase – e-books, videos, games and mobile apps – is not actually ours. Behind the product lies the sole decision of large technology companies like Amazon, Apple or Microsoft. Even Steve Jobs said that every iPhone periodically contacts Apple servers to check the applications the user has purchased. At the same time, the company itself reserves the right to block access to a particular product at any time for any reason.
We also found the following quote from Harvard law professor Jonathan Zittrain interesting:
“…There will be file-sharing networks and other online storage of works declared illegal. However, it is hardly worth hoping that BitTorrent will become a lifeline for the preservation of prohibited works of art.”
It’s amazing how accurate some predictions turn out to be. In particular, the similarity between BitTorrent and blockchain technologies really lies in the distributed storage of data across many independent devices. Thanks to this, both protocols can be called decentralized, since they do not have a single control center.
The only difference is that BitTorrent is optimized for file transfer, and blockchain is optimized for secure data storage. However, if one or more users delete files from their devices for some reason, this will not result in data loss on the network. Files and transactions will be available as long as at least one user has a backup copy of them.
NFT as an antidote to injustice — Vladimir Okhotnikov
“I hear constant criticism towards NFTs, and this criticism is largely justified. But it seems that along with fair comments there is also unjustified condemnation. Some statements like ‘the bubble will burst soon’ or ‘no one is interested in this’ sound too categorical,” says Vladimir Okhotnikov.
One can get the impression that collective madness is happening in the world. For example, Jack Dorsey, co-founder of Twitter, is selling his first tweet as a unique NFT token for $2.9 million. Or, for example, some anonymous buyer pays 2250 ETH for a digital picture of a CryptoPunks monkey, which is approximately $4.9 million today. Or that Tron founder Justin Sun is purchasing Beeple’s dystopian Ocean Front landscape, symbolizing the effects of devastating climate change, for $6 million on the Nifty Gateway platform.
We don’t mind, there are facts that the creator of a unique token may not have anything to do with the work of art. At the same time, the real author may not even know what is happening.
Additionally, there are a lot of unrealistic financial promises around NFTs, and we can agree with that as well. Sellers of such tokens paint rosy prospects: buy now and tomorrow you will resell for many times more, although in reality many are left with unclaimed tokens in their portfolio.
Despite these arguments, unique digital tokens can easily be placed on the same level as traditional collectibles. Common features prove the viability of NFTs:
- The value of many digital collectibles is symbolic, unrelated to functionality, and physical ownership is not a critical factor in status.
- Further development of technology and infrastructure will overcome the speculative nature of the NFT market and make it sustainable.
- The possibility of large-scale re-sale now does not mean the presence of fraud. Any new market is inherently illiquid.
- Cultural and historical meaning develops over time.
If someone wants to make a counterargument, they say that NFTs do not provide real ownership rights. From a legal point of view, this is true – the owner of a digital token has no right to a tangible object. However, before we conclude that tokens are not needed at all, let’s ask ourselves: do other digital goods that people pay money for provide ownership rights?
The next time you buy a game on Steam, think about whether you will become its real owner. Look at Amazon, which remotely erased books from users’ devices with the click of a finger. Well, there’s even less to say about streaming services like Netflix and Spotify.
People generally buy candy wrappers, titles, and achievements in mobile games. And, apparently, they need all this. So the lack of legal rights to a physical object is not an excuse not to own an NFT. People pay for them, which means the tokens have value to them.
What was yours is ours now — Vladimir Okhotnikov about scam from Amazon
The ability to delete books, movies and music you’ve purchased without your knowledge is a crime. All this is due to the inability of laws to effectively regulate such technologies, with the help of which it would be possible to so easily delete files that both belong to you and not to you, that are in your possession, but under the remote control of companies.
It’s hard to believe that Amazon will no longer delete books from user devices. This is likely to happen and the company may resort to this method again.
“Imagine you bought an item from a store and had it delivered to your home, and then it turned out that the company shouldn’t have done it. It cannot climb into your window, pick up the package and leave money for an allegedly erroneous service: this will still be considered a crime,” said Vladimir Okhotnikov. “The law in the case of digital goods, unfortunately, is on the side of large corporations.”
How it all started — Vladimir Okhotnikov
According to Amazon’s policies, the company has the authority to close your account and remove content from your device at any time. Such an incident just happened to Miss Linn from Norway – her account on the platform was deleted without prior notice or explanation.
Even after contacting support and claiming that the girl always had only one account, they still refused to restore access, citing a connection with a previous account that was allegedly closed for violating Amazon rules.
Linn never received a specific explanation. Therefore, the girl decided to publicize this outrageous incident. After posting this message, Amazon did restore her account without providing any specific explanation. And a go-to reply from Kinley Pearsall, a public relations consultant for Amazon Kindle, can be considered useless in this case:
“…If any users are having difficulty accessing their content, we recommend contacting customer support for assistance.”
Ms. Linn contacted support multiple times, but Amazon never responded to her questions.
This case once again highlights the potential risks for users, especially those who use DRM (digital rights management) to protect their digital content. As practice has shown, you can easily lose not only access to the platform, but also everything that connects you with it: loot boxes, skins, books and much more.
In conclusion – a parade of devaluations
We understand that most people generally regard cryptocurrency as a questionable tool. We won’t try to convince you otherwise.
But we note that traditional fiat money is far from ideal. Due to constant inflation, their purchasing power decreases over time. For example, the Turkish lira and the Argentine peso depreciated greatly against the US dollar over the previous year.
At the end of 2023, the USD/TRY rate increased by +57.40%, and USD/ARS by 352%. In both cases, national currencies collapsed, reaching new absolute historical lows. What led to this does not make sense to consider in this article. By this we only want to show that the problem of devaluation also applies to ordinary government money. This fact is worth taking into account before jumping to conclusions about the fraudulent nature of NFTs and crypto.
To sum it up, let’s say that NFT is not so much a tool for making money, but rather a technology that gives absolute rights to own a digital asset. While a token may not allow you to own an object in the physical world, it reliably protects you from attacks by third parties in the digital space.
In other words, the owner of an NFT can be sure that no one will be able to deprive him or her of the right to own a unique digital asset, unless the entire blockchain system breaks down. Technically, no one can arbitrarily take or copy a token as long as it is securely “tied” to the ecosystem using a unique digital fingerprint.
