TTRPGS, Blockchains, and NFTs

When Kickstarter announced recently that it would be investing in blockchain-based infrastructure, there was widespread backlash. Blockchain technology is environmentally damaging and is of limited use. Creators such as Possum Creek Games (Wanderhome) announced their intentions to move off Kickstarter, while companies such as Chaosium and Wizards of the Coast continue to express interested in non-fungible tokens, digital items which exist on a blockchain.

While I'm writing this article, I do need to point out that I'm not a great person to do so; my understanding of blockchains, NFTs, cryptocurrencies, and related technologies is very, very limited and my attempts to get a handle on the subject have not been entirely successful. I'm sure more informed people will post in the comments.

What the heck is an NFT (& what does it mean for digital artists)

What is a non-fungible token (NFT)? In this graphic designer's guide to NFTs, we explore how Non-Fungible Tokens work in the context of digital art and how you can start turning your digital creations into sought-after NFTs.

dribbble.com

Kickstarter is not the only tabletop roleplaying game adjacent company delving into such technologies. Call of Cthulhu publisher Chaosium announced in July 2021 that it was working with an NFT company to bring their Mythos content to a digitally collectible market, with specific plans to sell two different models -- the Necromonicon and a bust of Cthulhu -- from the Cthulhu Mythos; and while things went quiet for a while, last week the company tweeted that 'We have more - lots more -- to drop... when the Stars are Right." A Facebook statement from Chaosium's CEO appeared on Twitter talking more about the decision.

D&D producer Wizards of the Coast said in April 2021 that it was considering NFTs for Magic: The Gathering. More recently, an email from WotC's legal representatives to a company planning to use NFT technology in conjunction with M:tG cards, alleging unlawful infringement of its IP, indicated that WotC was "currently evaluating its future plans regarding NFTs and the MAGIC: THE GATHERING cards" but that "no decision has been made at this time."

On Twitter, ErikTheBearik compiled Hasbro/WotC's involvement with NFTs so far.

Gripnr is a '5e based TTRPG NFT protocol' with Stephen Radney-MacFarland (D&D, Star Wars Saga Edition, Pathfinder) as its lead game designer. OK, so that's about as much of that as I understand!

Some company in the TTRPG sphere have taken a stand. DriveThruRPG stated that "In regard to NFTs – We see no use for this technology in our business ever." Itch.io was a bit more emphatic:

A few have asked about our stance on NFTs: NFTs are a scam. If you think they are legitimately useful for anything other than the exploitation of creators, financial scams, and the destruction of the planet the [sic] we ask that [you] please reevaluate your life choices. Peace. [an emoji of a hand making the “Peace” symbol]

Also [expletive deleted] any company that says they support creators and also endorses NFTs in any way. They only care about their own profit and the opportunity for wealth above anyone else. Especially given the now easily available discourse concerning the problems of NFTs.

How can you be so dense?

NFTs -- non-fungible tokens -- and blockchains have been dominating the news recently, and with individuals and companies taking strong stances against them, it's fair to ask why. The environmental impact of the technology has been widely documented - it's inefficient, and the need for blockchains -- a sort of decentralized ledger -- to have multiple users validate and record transactions makes it very energy intensive. In an era when climate change is having more and more devastating effects around the world, use of such technologies attracts considerable backlash.

Other ethical concerns regarding NFTs specifically is that the purchaser of an NFT is not actually purchasing anything, and the value for the digital 'token' they've purchased is speculative. When you buy the NFT of a piece of art (for example) you don't own the art itself; you only own a digital token associated with the art. The whole concept is likened to a 'house of cards' or a 'scam' by its critics.

 

[Justice and Rule]

A US dollar has a different value than a British Pound or a Canadian dollar or a Mexican peso.

So if a bitcoin has a different value than different NFT, wouldn't that be similar?

No, that'd be completely different. The difference between a US Dollar and a British Pound would be like the difference between different cryptocurrencies, not different coins within a currency. Every Dogecoin will be the same because it's meant to specifically be fungible, otherwise it wouldn't work as a currency. That'd be like if I had 5 quarters and each one was worth different amounts.

On the other side, NFTs are meant to be unique items and thus cannot have any sort of shared value; one NFT will not necessarily have the same value of one within the same set, even if it right next to it in the order. Hence why they are non-fungible. This isn't disputable, because we're talking about the undisputed definition of the words "fungible" and "non-fungible".

 

[Abstruse]

Well, a ponzi scheme is illegal. So far, crypto currency is not.

A ponzi scheme is illegal. Nobody has been charged with one yet. Just because nobody has been arrested or prosecuted yet does not mean something is legal. Enron ran a ponzi scheme for many years before anyone was arrested. Doesn't mean it wasn't a ponzi scheme before they were.

But we're talking about two different things here really. NFTs and cryptocurrency may or may not be a ponzi scheme, but a ponzi scheme is a very specific form of fraud, where the capital from new investors is used to pay dividends to previous investors to show profits that the company has not actually generated. No scheme is going to exactly match that definition except for the one run by Charles Ponzi in 1920. What people are saying when they call cryptocurrency and NFTs a ponzi scheme or a multilevel marketing scheme or a pyramid scheme is not "This meets exactly the technical definition of those other types of scams in order for them to be illegal", they are saying "This is the same general scam being run here that is similar to these other scams in how it functions". There are many ways to run ponzi schemes or pyramid schemes or MLMs that are technically legal. But that doesn't make them ethical nor does it make them suddenly not scams just because they're not technically illegal.

 

[Tally Isham]

But one unit of a cryptocurrency has the exact same value as any other. Just like a crisp new dollar bill and a wrinkled, tattered dollar bill that someone has written a phone number on are both worth $1. That's what makes the fungible.

Again, not every bitcoin is the same as every other bitcoin.
A bitcoin can become tainted. You would not want to be holding a tainted bitcoin.
Every bitcoin has a history that cannot be erased and easily searchable with an explorer. If it was used in a crime, it becomes tainted.
Legit exchanges like Coinbase would know and not buy, sell or hold them.

 

[Abstruse]

A US dollar has a different value than a British Pound or a Canadian dollar or a Mexican peso.

So if a bitcoin has a different value than different NFT, wouldn't that be similar?

No, because those are not the same thing. One US dollar bill is worth the same amount as any other US dollar bill of the same denomination. One British Pound Sterling coin is worth the exact same as every other British Pound Sterling coin. That is what "fungible" means, it can be replaced by another of the same thing and have the same value. A bitcoin is not an NFT so they do not have the same value, but one bitcoin is worth exactly the same as every other bitcoin and thus bitcoin is fungible. Each NFT is unique, there will only ever be one of that particular token on that particular blockchain minted at that particular time. It has a unique value that is not equivalent to every other NFT. Therefore it is non-fungible.

That's why I used the poster example earlier. If I have a poster of the cover of the original Dragonlance novel, it can be replaced by any other poster of the cover of the original Dragonlance novel. If mine gets torn or damaged or lost, I can buy another and it will have exactly the same value. It is fungible. However, if I take that poster to a convention and get it signed, it is not the same as every other poster. It is the only poster of the cover of the original Dragonlance novel that was signed by Margaret Weis, Tracy Hickman, and Larry Elmore at Gen Con in 2004 with those exact signatures (which will not be the exact same signature in the exact same place if another person got their poster of the cover of the original Dragonlance novel also signed at the same convention). If it is lost, I cannot replace it with a different print of that same poster signed by those three people at that same convention because it is not exactly the same. It is non-fungible.

 

[Justice and Rule]

A ponzi scheme is illegal. Nobody has been charged with one yet. Just because nobody has been arrested or prosecuted yet does not mean something is legal. Enron ran a ponzi scheme for many years before anyone was arrested. Doesn't mean it wasn't a ponzi scheme before they were.

But we're talking about two different things here really. NFTs and cryptocurrency may or may not be a ponzi scheme, but a ponzi scheme is a very specific form of fraud, where the capital from new investors is used to pay dividends to previous investors to show profits that the company has not actually generated. No scheme is going to exactly match that definition except for the one run by Charles Ponzi in 1920. What people are saying when they call cryptocurrency and NFTs a ponzi scheme or a multilevel marketing scheme or a pyramid scheme is not "This meets exactly the technical definition of those other types of scams in order for them to be illegal", they are saying "This is the same general scam being run here that is similar to these other scams in how it functions". There are many ways to run ponzi schemes or pyramid schemes or MLMs that are technically legal. But that doesn't make them ethical nor does it make them suddenly not scams just because they're not technically illegal.

Yeah, I was making a generalized comparison based on the idea that "people are voluntarily giving their money", not an actual comparison between the two. One is a commodity, one is a(n illegal) investment technique strategy. If all we need to say is "Well, they weren't coerced into giving their money", then basically nothing is forbidden, everything is permitted. That, to me, is just opening the doors for fraud and other schemes, which are currently rife within the crypto ecosystem because it's largely unregulated.

Again, not every bitcoin has the same as every other bitcoin.
A bitcoin can become tainted. You would not want to be holding a tainted bitcoin.

No, this doesn't track: a "tainted" bitcoin is not its natural or proper state, in the same way illegally-obtained funds might also be seized by the government if they find out about it. If everything goes as planned, you have no "tainted" bitcoins. Being "tainted" is not an actual function of a bitcoin, but a designation of something happening with it that isn't meant to happen. By design, a designated bitcoin is meant to be worth the same as every other one in its grouping. Again, it's meant to be a currency, which needs to be fungible to work. NFTs are specifically not fungible because each NFT is meant to have a unique price and to be viewed as an individual piece.

 

[Abstruse]

Yeah, I was making a generalized comparison based on the idea that "people are voluntarily giving their money", not an actual comparison between the two. One is a commodity, one is a(n illegal) investment technique strategy. If all we need to say is "Well, they weren't coerced into giving their money", then basically nothing is forbidden, everything is permitted. That, to me, is just opening the doors for fraud and other schemes, which are currently rife within the crypto ecosystem because it's largely unregulated.

Again, you're focused on "Well actually if you're technical about it..." arguments about general statements. By that definition, Enron was not a ponzi scheme because it was a corporation that traded in energy, so therefore we're talking about a corporation and a commodity and not a scheme. The SEC disagreed in 2001 and two of the top executives of that company went to prison. When someone says "Enron was a ponzi scheme", they are saying that the corporate activities of the Enron corporation used the tactics of an illegal ponzi scheme. Just like when someone says "NFTs/cryptocurrency is a ponzi scheme", they are saying not saying the tokens themselves are a ponzi scheme but that the manner in which they are minted, sold, and traded are comparable to the methods used in ponzi schemes.

 

[Justice and Rule]

Again, you're focused on "Well actually if you're technical about it..." arguments about general statements. By that definition, Enron was not a ponzi scheme because it was a corporation that traded in energy, so therefore we're talking about a corporation and a commodity and not a scheme. The SEC disagreed in 2001 and two of the top executives of that company went to prison. When someone says "Enron was a ponzi scheme", they are saying that the corporate activities of the Enron corporation used the tactics of an illegal ponzi scheme. Just like when someone says "NFTs/cryptocurrency is a ponzi scheme", they are saying not saying the tokens themselves are a ponzi scheme but that the manner in which they are minted, sold, and traded are comparable to the methods used in ponzi schemes.

Sure, but my point was that I wasn't actually making that comparison, but pointing out about how terribly low a bar was being set for a proper economic exchange. I do agree with you, I just wasn't making the comparison because I was more focused on something else in the statement.

 

[Tally Isham]

If Hasbro minted a few Magic the Gathering NTFs and a few kids brought, played, and traded them...
what exactly is the problem here?

 

[Jd Smith1]

No, because those are not the same thing.

Actually, they are. They are an item which has value based on public acceptance, and which is vaguely tied to a belief in the issuing government. In and of themselves, they have little or no value. Moreover, a dollar in New York City has a different purchasing power than a dollar in Mule Shoe, Texas (yes, that is a real town). If you doubt that, check gas prices.

Back in the early days of the Republic, both states and banking institutions issued legal currency.

Since money is based on little more than faith, why can't a cryto currency flourish? All it would seem to need is consumer confidence.

 

[Jd Smith1]

If Hasbro minted a few Magic the Gathering NTFs and a few kids brought, played, and traded them...
what exactly is the problem here?

Good question.

Would it diminish the value of the paper cards?