TTRPGS, Blockchains, and NFTs

Jd Smith1 · Feb 14, 2022

eyeheartawk said:
Okay. So your contention is that a New Mexico Dollar is not substantially equivalent enough to a New York Dollar to be interchangeable, and thus, at any given point we have, what millions of different versions of a Dollar floating around and we just all never realized it until just now, in this thread? Even if that is your contention, I don't really see what really any of that has to do with why crypto and NFTs are bad. This is starting to read to me like a intentional thread derailment.

I am wondering about your responses in the same way, but I will try one more time: as your own clip from wiki shows, the key word is interchangeable, not value. This is Economic terminology 101. The other poster kept saying that every dollar has the same value, which its patently untrue, as anyone who has speculated on currency exchanges can testify.

To repeat: the poster I had been discussing with kept stating that value was the fungible status of dollars, which in fact it is the interchangeability.

I never mentioned a New Mexico dollar. If you are going to try to try to use my posts, quote for accuracy.

eyeheartawk said:
Seriously? Is this performance art?

Yes, seriously. People do have opinions different from you or your circle of friends.

Jd Smith1 · Feb 14, 2022

UngainlyTitan said:
You do not see a 6 million fold increase in the energy cost per transaction as an issue?

No. It represents a tiny fraction of the power used by social media. Slash and burn farming in South and SE Asia alone puts more carbon into the atmosphere than the entire USA in a given year, so to me, it is just quibbling about ten snowflakes during a week-long blizzard.

UngainlyTitan said:
Not from the UK though, but when the UK first considered switching to Proportional Representation voting system one UK newspaper denounced the Single Transferable vote system, (which my country uses) as too complex for the average Englishman.

They might have a point...

UngainlyTitan · Feb 14, 2022

Jd Smith1 said:
They might have a point...

Snarf Zagyg · Feb 14, 2022

So, a few thoughts about the overall concepts (NFTs, cryptocurrency) in general, and then I'll drill down into why these concepts aren't really applicable to TTRPGs.

First, I want to give a h/t to the many excellent commenters doing some great work in this thread. There's a lot of you, but I know that @Abstruse has had some posts of nearly-Snarfian length. Secondly, I also want to recommend the excellent video by Dan Olson (Line Goes Up). Yes, it is very long, but there's a lot of people that just throw their hands up when they hear about these ideas, or, worse, assume that because we now have Super Bowl ads and some celebrities shilling for these concepts, they must have a-ok.

1. NFTs. (non-fungible tokens)

I normally go into great length, but this one is pretty simple. Just no. To borrow the name of Jordan Peele's upcoming movie, NOPE. Others have gone into length, but the basic issue is this- an NFT is simply a small bit of code. Because it is, by definition, so small, it can't really "be" much. So when you "buy" an NFT of, say, digital art, you aren't buying the art. What you are buying is, in effect, a receipt that says you bought something. They say it's a contract, but it's more like a record of a transaction. For digital art, that usually means that you have bought a link to a website- plus bragging rights that you bought it. You have no guarantee that the digital art will stay up. You have no guarantee that the art at the website won't be changed. You don't have exclusive rights to digital art- anyone can just copy your image. And finally, you have no guarantee that the artist who created the art is being compensated, or even knows that you bought it- or that you have any legal rights in the art.

Now, if all of this is true, why have you heard of these crazy stories of some NFT going for thousands, or MILLIONS of dollars? Well, mostly because it's self-dealing (sometimes referred to as pump & dump). It's insiders selling each other the NFTs to create the illusion that they are worth money in order to drive the value of them, in the hope that they can unload them on bigger fools (or create value in the entire market) without taking on the possibility of loss.

Next, you will occasionally here the pie-in-the-sky ideas like "Well, it's not just digital art. It can be anything. Soon, your medical records will be NFTs. All land sales and land registries will be NFTs. EVERYTHING WILL BE NFTs!" Putting aside for the second that this type of hysteria and hype is exactly what any investor knows to avoid, this makes as much sense as buying a rare book and assuming you have the rights to make the movie out of it (you don't). Anyone with a passing understanding of medical records, and how blockchain and NFTs work, immediately understands why you don't want a public ledger. And anyone who has bothered with land registries or title searches immediately appreciates that while a append-only database might possibly work in theory, the specific use of NFTs would be fatal in fact.

From there, you have to go into another uncomfortable fact- as I wrote before, NFTs are small bits of code. And you know where this is going- where you have code, you have coders. Where you have coders, you have hackers. And yes, NFTs can hide exploits, and they are being used for just that purpose. So beyond the usual hacks (including phishing, etc.) you could be purchasing your very own malware.

2. Cryptocurrency (that isn't currency).

Next is crytpocurrency, like Bitcoin. I should start by saying that Bitcoin, for me, is bittersweet. In 2011, I became interested in TOR and the Silk Road and, by extension, Bitcoin ... you know, for a friend. I thought the whole thing was kind of interesting because I had a longstanding interest in these subjects ever since reading Applied Cryptography when I was young(er). Anyway, I acquired some bitcoin back then, but after using it, chose to get rid of it as I realized that this wasn't a currency. So I could have acquired a fair amount of bitcoin in 2011, and didn't.

Oh well! Sometimes being incorrect is worse than being right.

Point is, bitcoin (and other cryptocurrencies) have never been currencies in the way that we think of currency. Because it's not- it's an investment. I understand that this distinction is often lost on a lot of people- for example, a fungible commodity, like a common share, might be rapidly bought and sold by day traders. They are hardly "investing" in it. On the other hand, investment banks can, and do, take large positions in particular currencies assuming they will appreciate vis-a-vis other currencies - which is certainly a type of investment.

The primary distinction is that, for most people, currency is not something you hold on to for its intrinsic value- it's just a medium of exchange. I don't keep $80 in my physical wallet assuming that two years from now, it will be worth more. I keep it there to buy booze, books, and pizza slices that have no pineapple topping.

That's not what is happening with crypto. There is no use-case scenario for most people where crypto is better than "real currency." I did emphasize "most people." If you are a country avoiding sanctions (like North Korea), laundering money (like a drug lord), or otherwise willing to engage in high transaction costs and less security - then crypto is fine. But that's because it's the same as providing any other "bartered good" that the value is indeterminate, but has the advantage that unlike physical bartered good (shipments of cocaine, weapons) it can be transacted digitally. But it doesn't work as a currency for almost any other good because the structural issues with crypto (which include rapidly fluctuating prices since, again, it's a volatile investment, and also include significant lag times in processing transactions which make the volatility worse) mean that merchants don't want to accept it.

The best way to understand cryptocurrency, then, is this- it's just using increasing amounts of a real-life scarce resource (energy and time- aka computing power) to create digital scarcity. That digital scarcity is the investment you are making. What makes it somewhat ... questionable ... is that most investments, whether they are shares in a company, or even Beanie Babies, have some underlying value (however slight). The value of crypto is only that there isn't much of it, and people are willing to pay for it.

As long as more people keep coming into the market, it works out great. As long as people keep perceiving it to have value, that's awesome. And because it has utility (especially to non-state actors who are doing illicit thing, or state actors who want to avoid scrutiny, or people who are trying to keep things from prying eyes ... similar to the idea of bearer bonds ...) for people who are willing to overlook the transaction costs, it still has continuing vitality.

3. Are these Ponzi schemes? Pyramid Schemes? MLMs? Scams?

This is somewhat more complicated. Specific types of scams and frauds have specific definitions- it's never a good idea to get caught up in the Sealioning of certain supporters who want to debate the exact terms of a Ponzi scheme, or, for that matter, MLMs (which in the United States, are actually legal ... so long as they aren't illegal pyramid scheme ... GO AMERICA!). Instead, it's probably best to say the following:
If you are ever promised a guaranteed rate of return on something that is above the average return of the S&P 500 over time, you should run away. In addition, if you don't understand how something works, but think that Matt Damon saying "Fortune favors the brave," means that you need to be brave... run away.

What you should know is the following- this area is currently filled with grifters, fraudsters, and marks. If you don't know who the mark is, you're the mark. It favors people who are already very very wealthy, and it favors people who are computer-literate (there is the constant danger of hacking). There is no consumer protection, so if you lose everything, you lose everything.

(I am avoiding discussion of the many externalities of crypto, by the way, which I think others have sufficiently covered)

4. What about the thing we come here for? You know, TTRPGs?

At the most basic level, the problem with NFTs (especially), cryptocurrencies, blockchain, and some of the proposed Web 3.0 ideas is simple- they are trying to solve problems that don't exist, or solve simple problems in ways that are worse. If you are asking ... "But why,"
the answer, as always, is money. It is an attempt to further monetize things that aren't, necessarily, monetizable. In an ideal world, if the underlying tech wasn't so problematic, you could have a company sell you the right to your NFT avatar, and then Morrus could charge you to put your NFT avatar next to your post, and everyone would be conducting the business in crypto.

So when it comes to corporate entities, the idea that "blockchain" or "NFTs" is simply the idea that they could make more money- it's just a buzzword, similar to, "synergy," or "pivot-to-video," or "microtransactions," or "transition to the service model." Most of the decision-makers at large companies might parrot these words without a full understanding of what it means, other than it's what other people are doing. This is especially true of the world of NFTs and crypto. Heck, the history of Bitcoin is one of announcements of companies saying that they accept it, and then, a little later, quietly getting rid of it.

Now, you have the backlash brewing. One of the most interesting is in the area of videogames- primarily because you have the CEOs looking for money and not fully understanding the tech, while the developers who make the games have a better understanding of the situation. One of my favorite ongoing stories is that Ubisoft has been publicly pushing for NFTs, while the people that, you know, actually write the code have been pushing back (best comment from an Ubisoft employee- "Are we competing with EA for the ‘Most hated Game Studio by the public’ title? Because this is how you do it.").

Simply put, there is absolutely no reason to use blockchain, crypto, or (ESPECIALLY) NFTs in TTRPGs. There is nothing that is done by this tech that cannot already be done, better and faster, by what we have. More importantly, people need to understand the severe issues that these products, ESPECIALLY NFTs have, given that the TTRPG and collectible market overlap.

We need to look for ways to use technology to make sure that artists and other creatives in the TTRPG industry get paid. This isn't it. There are some artists that, as first movers, have made money in the NFT space. But there are many, many more who have paid the price to mint and have lost money (after all, look at the quality of the art of most NFTs). There is also no reliable way to ensure artists get paid or have their rights protected unless you use reliable third parties- which, you know, gets rid of the whole reason for NFTs and just shows that they are a technology that creates additional problems without solving the ones that are necessary.

And that's my final takeaway- engineers and problem solvers look at the problem and try to devise the best solution. Grifters and scammers will try to sell you a bad solution for your problems, while promising it can and will solve even more problems.

Umbran · Feb 14, 2022

Jd Smith1 said:
I don't see this being a issue.

Then it is time to do some math.

A single crypto transaction currently eats up 1000Kwh of electricity, at a cost of roughly $104. At the moment, you don't see that cost, because it is distributed across the entire crypto network. But, scaled up to US credit card levels, that would become visible, because it becomes about $10 billion a day, eating up almost ten times the current total US electricity generation.

Is the issue more clear to you now?

Jd Smith1 · Feb 14, 2022

Umbran said:
Then it is time to do some math.

A single crypto transaction currently eats up 1000Kwh of electricity, at a cost of roughly $104. At the moment, you don't see that cost, because it is distributed across the entire crypto network. But, scaled up to US credit card levels, that would become visible, because it becomes about $10 billion a day, eating up almost ten times the current total US electricity generation.

Is the issue more clear to you now?

It wasn't unclear. I explained my view of it in post #202.

doctorhook · Feb 14, 2022

Jd Smith1 said:
I don't see this being a issue.

You don’t see an issue that it costs an average of a million times more energy to process a single transaction? Energy is literally the bottleneck the limits human technology, and crypto is a spectacular waste of energy… with no advantages except for speculators who might make some money. Why should society condone this?

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

I object to kids being sold financial securities, especially volatile ones and scams.

Abstruse · Feb 14, 2022

Mortus said:
Why have a decentralized ledger? Couldn’t a company like WOTC create an official ledger for those that want digital collectibles?

Honestly, this is the point I bring up when people talk about integrating NFTs into games (as opposed to simply selling NFTs of game art the way the makers of Dead by Daylight did via a cross-promotion with an NFT firm). NFTs mean that the company in question no longer controls the NFT, including where and by whom it can be sold, as opposed to the current system in most MMORPGs (I'm going to use Star Wars: The Old Republic as an example because it's the one I have the most personal experience with that's not over two decades old) where the assets and marketplace are controlled by the company.

If I want to buy an in-game item in SWTOR, I have three main options. The first are in-game vendors, which don't carry the rare and most desirable items. I mean obviously, they're not rare if the NPC in the major player hub is selling an infinite number of them. You purchase items from them using Credits, which is the base in-game currency. You get a lot of credits thrown at you for doing even the most basic missions so that, if you don't go buying anything extravagant like super-expensive speeders or unlocking areas of your player home, you've likely got at least 1 million credits if not a couple of million by the time you finish your class's base storyline.

The second option is the "cash store", which on SWTOR is the Cartel Market. The way these typically work is that you have Cartel Coins on your account that can be spent on items for sale in the Cartel Market. You get Cartel Coins by completing missions (which do not get you very many at all), by setting up two-factor authentication on your account (which gets you 50 coins per month which still isn't very much), or through paying money to BioWare, either by purchasing a subscription (which gets you 500 coins every 30 days while you're subscribed) or by buying them directly (at prices ranging from $2.99 for 250 coins to $39.99 for 5500 coins. You can then spend these coins on mostly cosmetic items - the armor and weapons you get are at best empty shells that must have accessories added to them to give them in-game bonuses but are typically just used as a cosmetic costume (you have the option for at least two sets of armor, one that you're wearing for bonuses and one that you put on in the Outfit Designer gives you no bonus but is the armor that everybody sees on your in-game avatar, allowing people to customize their appearance specifically without regard to the items' stats) - or a handful of very minor boosts, like getting 25% extra XP for an hour.

The third option is the in-game player marketplace called the Galactic Trade Network. This is where players can buy and sell any item in the game that is not locked to the account (some weapons, armor, and other items are locked to a specific character or to your account so you can't sell or trade them). You can list any item you want for sale at any price you want in Credits and the listing will stay active until somebody buys it or until the time runs you (you set the time limit, anywhere from 1 day to 7 days). The transaction is handled automatically so the seller does not have to be online, nor can the seller "scam" a user by posting something with an inaccurate description (every item has a unique name and is listed by that name) or by somebody taking their credits without giving them the item (the GTN "holds" the item while it's listed for sale and, if it sells, the buyer gets the item in their in-game inbox while if it doesn't sell, the item is returned to the seller. Also, each transaction on the GTN charges a certain percentage of the selling price in credits, so each transaction takes at least some credits out of the economy of the game. So if I get an item in the game that I don't want, I can sell it on the GTN for credits and if I want an item I can't find on my own, I can buy it on the GTN from another player for credits.

All of these items are managed on BioWare's servers. If I buy a subscription or buy Cartel Coins, I am paying money to BioWare. I cannot exchange real-world money for in-game items directly, but there are ways around that. I can buy Cartel Coins, then use those to buy items off the Cartel Market that are currently selling well on the GTN, sell them on the GTN, then use the credits I got from that sale to buy whatever I want off the GTN.

You'll notice a few things about this system.

1) All cash money is flowing into BioWare. Every cent of actual real-world US Dollars, British Pounds, etc. goes only to BioWare.

2) No cash money is leaving the ecosystem. No matter how I fudge the system, I cannot trade anything within the system for real-world money. Because the Cartel Market also sells randomized lootboxes of items and the loot from everything except quests and missions is randomized, this avoids any gambling laws because none of the items have a real-world value.

3) I can spend as much real-world money as I like and, possibly with a couple of added steps, buy any item I want within the game.

4) Everything is handled on the BioWare servers. You do not need to leave the game (except maybe to go to the official SWTOR website also hosted on BioWare servers) to do any of this, so BioWare has oversight of all transactions taking place.

5) While there is a "black market" of forums and other places where people can buy or sell in-game items for real-world money, BioWare monitors these sites pretty well and bans users who do so on a regular basis, making it a very risky proposition.

Now, if we switch this to NFTs, pretty much all of that breaks. Cash money can flow outside of BioWare controlled servers because NFTs can be traded anywhere since they're authenticated on distributed databases on the blockchain instead of by the databases on BioWare servers. Players can spend cash money for in-game items without it going to BioWare or even collecting a percentage of it as a trading fee. BioWare can no longer control the source of in-game items because their ownership is not saved on BioWare servers, meaning that if a player is banned from the game for whatever reason (such as violating the part of the ToS that bans buying or selling in-game items outside of the approved BioWare methods), that player can still sell their NFTs to other players.

Okay, that sounds great for players, doesn't it? You're freed from BioWare having as much power over your account and you have more options. But here's the problem:

Why in the hell would BioWare agree to do this?!

You're asking the company to give up that level of control over their own product for...what? What benefit does BioWare get out of this? They lose the ability to track which players have which items, they lose on the cash money being spent on items, they lose the ability to enforce their ToS on item sales, and - here's the big one - the in-game items will now have a real-world cash value associated with them, which puts BioWare in violation of gambling laws in many jurisdictions.

Then there's the basic coding problems. The game would need to be updated to authenticate NFTs. And it would need to perform these authentication requests constantly. Otherwise, what's stopping me from equipping my NFT gear on my character (with the game checking that I have the NFT in question first), then selling that NFT while I'm still logged into the game? How will the game know I no longer own this NFT? And what happens when the player I sold it to logs in and equips the same NFT item I sold them? These are all coding problems that will have to be solved requiring I can't even guess how large of a team working for I can't even guess how long to implement and test it all (because the last thing you want in a situation like this is a duping bug), both of which means spending a massive amount of money.

What benefit is there to BioWare to spend that much money on development in order to lose part of their revenue stream, their control of in-game items, and possibly run afoul of gambling laws? If they cared that much about player convenience, they wouldn't have taken seven years to implement weapons into the Outfit Designer (a feature that still isn't live until the next major update which has already been delayed twice).

So far, I haven't gotten a single answer to that question about any game company. And as if they were trying to prove me right, Ubisoft minted 2250 NFTs for in-game cosmetic items for Tom Clancy's Ghost Recon Breakpoint. Of those 2250 NFTs, they have sold a grand total of...15. For a total of less than $400...in Tezos, a cryptocurrency people who don't regularly follow cryptocurrency probably don't even know exists.

Jer · Feb 14, 2022

The thing that all of these conversations always boil down to is that there is so much technology out there around these things that scammers are able to exploit that to muddy the conversations up.

The tech is what we used to call "peer-to-peer" but that name isn't sexy enough to get investors to buy into it. In fact all of these new terms are basically branding exercises rather than techology (except for the underlying distributed database idea that blockchain is built on - that's actually a clever bit of tech).

Blockchain - it's just a distributed database where you don't have to trust a central database. That's all it is. It requires multiple systems to be running the database for it to work because it's a peer-to-peer technology (and they're crucial for having enough nodes to make the tech work without some kind of central authority) but at the end of the day all it is is a distributed database that records transactions. The distributed database uses a lot of power because it's running redundant databases on many systems all over the world to work.

Bitcoin - a convoluted system for generating tokens to be entered into the distributed database that is guaranteed to make those tokens rarer and rarer as time goes on. Unlike similar systems in the real world (such as, say, Collectible Card Game manufacturers) the system for generating tokens is distributed across the peer-to-peer system but controlled algorithmically to guarantee increasing rarity over time. Bitcoin is the thing that uses TONS of power because the algorithm that generates tokens is designed to basically make computers waste a whole lot of time in the hopes of getting lucky and generating a new token.

Non-fungible token - a fancy way of saying "a receipt for your transaction that can't be faked". The idea is that instead of generating tokens algorithmically, you allow people to create collectibles and "sell" them - but the NFT software only tracks the sales receipts, not the actual item itself. So if you buy a jpeg what the NFT software is actually giving you is a receipt that says you purchased it, it's up to you and the previous "owner" to figure out what the heck "owning" a jpeg actually means.

All of these terms are straight up marketing terms. It's a distributed network for tracking ownership of tokens and that's all it is. The power that it gives over a central authority doing something like this is essentially there is no controlling authority over it to get sued or regulated (which makes it attractive to scammers, of course).

The thing that all of these companies that want to get into this blockchain environment never do is make the case for why whatever they're doing is better off on a distributed database with no central authority instead of being served from their own database servers. If you're running a game, you don't need a separate system to track the ledgers for who owns what on your system. (I also have no idea what Kickstarter thinks they're getting from a blockchain either).

Frankly most companies talking about blockchain, NFTs or whatever hyped term is being used this week all feel to me like either companies looking to keep their investors happy by saying "we're looking into it", or companies looking to tweak their stock prices by getting some future investors excited that they're using the current hype.

Jd Smith1 · Feb 14, 2022

doctorhook said:
You don’t see an issue that it costs an average of a million times more energy to process a single transaction? Energy is literally the bottleneck the limits human technology, and crypto is a spectacular waste of energy… with no advantages except for speculators who might make some money. Why should society condone this?

For about the 20th time: no.

As to why society should condone this? In a free country, it is no one's business what a given customer does with the electricity they purchase. So I suppose it depends on where you live.

doctorhook said:
I object to kids being sold financial securities, especially volatile ones and scams.

Do a lot of children invest in securities these days?

TTRPGS, Blockchains, and NFTs

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

Jd Smith1

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Jd Smith1

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UngainlyTitan

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Snarf Zagyg

Notorious Liquefactionist

Umbran

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Jd Smith1

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doctorhook

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Abstruse

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Jer

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Jd Smith1

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