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.

 

[Beleriphon]

They're not buying digital artwork, though, if I understand the technology correctly.

You do after a fashion. The the NFT is buying proof of ownership of a specific piece of digital artwork. Just like I can buy a print of a Monet, I can buy a digital proof of owernship of a specific Monet digital print via NFT. All the NFT does is prove I own a specific version of said "digital print". Hell, it doesn't convey copyright, or even a license. The art itself isn't even included in the NFT, it usually includes information about a website. So, with the ethereal nature of the web I can lose all value from an NFT by having a website go offline.

Not directed at Morrus: The reason that it comes across as scammy is becasue I can just right-click the art and I have infinite copies of said art. Unlike my Monet example digital art is functionally reproducible ad infinitum. Monet painted exactly one San Giorgio Maggiore at Dusk in 1908. I can go buy a print of that, but it isn't the original. Where as what constitutes the original digital art? The copy on the artist's hard drive, what if they hard dive is lost in a fire but they have an exact duplicate copy online? Unlike the Monet nobody would be any the wiser really since it is an identical duplicate copy of a file.

Blockchain for digital art is kind of dumb, but blockchain for proof of ownership of psychical products can make sense. Look at a deed to property, that is currenlty stored and registered somewhere by a government agency. Blockchain is a similar idea and could be useful in transactions related to real goods such as real estate or car ownership.

 

[UngainlyTitan]

NFT are a scam, may be blockchain can be used for something constructive but from my research nothing current is, in any way anything other then a scam

So the first issue is the Blockchain. This effectively is a read only append only ledger. There are no take backsies, if a error is entered into the ledger it cannot be undone. One either forks the blockchain or places a reference to the previous transaction noting it as invalid.
Because it is append only, if there is a high frequency of transactions it will get very large very quickly. Everyone has a copy, so this can rapidly explode in to very large volume of data flowing about the internet with the associated storage and computational costs.

One of the videos I have watched, had the opinion expressed, that bit coin mining is going to become beyond the ability of small miners due to the volumes of data they will need to store.

Now comes the really expensive side of the crypto operation the verification process. This usually involves computing a cryptographic value from a a cryptographic algorithm where the computational difficulty of the operation increases as earlier values are computed. These values are the source of coin in the crypto system and the increasing difficulty is deliberate to make the coins scarce.

This where the computation power and electricity costs are exploding to become a genuine environmental problem. (Note: the blockchain itself will eventually become so bloated and unwieldy to become a computational and environmental issue itself but that will take a lot longer.

When enough crypto coin are mined the current pending changes the the blockchain are appended by vote of the miners. This process between one update and another can take quite some time and is the source of all sorts of fun and games. It is also the source of the crazy gyrations of the fees for buying crypto or NFTs.

Furthermore, if any one actor mines most of the coin they get to decide what is appended to the blockchain,

Now to NFTs. they are tokens, think of them like browser tracking tokens, inserted into the blockchain recording ones right to something and telling you where to find it. They are not the thing itself, NFT's do not have the capacity to store much. Many of them are a static url to an image.
Here the problem is that if the original file disappears from the net, well tough luck, your expensive NFT is now pointing to a dead link.

The concept of NFT is one thing and I fail the see why it needs a technology like crypto blockchain. A simple straight forward contract between the supplier of the digital item and the purchaser should do just as well.

 

[UngainlyTitan]

NFTs - which my autocorrect tried to change to NUTS, perhaps appropriately? - strike me as the "tech dudebro" equivalent of multilevel marketing rackets - I mean, firms.

Well, if you watch the folding ideas video, that is exactly what it is.

 

[Abstruse]

The issue inherent with NFTs, cryptocurrency, or blockchain-based technology is that they're confusing by design. The culture surrounding the adoption of these technologies involves multiple buzzwords and in-jokes specifically to confuse outsiders attempting to quickly get an idea of what exactly is going on.

I'd like to second Dan Olson's video linked above (which was also linked in this week's News Digest) which does as decent a job as one can do with only two hours to work with to explain this whole mess. For those who don't have that much time, here's as close as I can get to a simplified explanation.

Note: This is simplified, which is another reason the complexity of the subject is considered an asset by supporters of NFT/crypto/blockchain. There are several details I will brush over or oversimplifications I'll make for the sake of ease of understanding. Which means it is easy to "refute" statements attempting to explain the whole thing by picking out one of those and "correcting" it. This gives the impression that critics of NFTs/cryptocurrency/blockchain don't know what they're talking about. even when they do.

The "blockchain" is a spreadsheet (called a "ledger") that is encrypted and peer-to-peer distributed. That means that anybody can download or host a copy of this spreadsheet because it is not stored in any one specific location. The spreadsheet is broken into "blocks" that contain a link to the previous block in the chain, a timestamp of when the block was last updated, and the transaction data for that block. Once a block is created, it cannot be altered or deleted but must instead be corrected by creating a new block.

Blockchains are frequently used for "cryptocurrency", which is "currency" that only exists within the blockchain. A block within the blockchain will state "Darryl owns 1 Coin" to prove that I own one "coin" of this cryptocurrency hosted on this particular blockchain. Each cryptocurrency therefore has its own blockchain to manage ownership of that cryptocurrency.

If I want to trade my cryptocurrency, it must be updated by creating a new block that references the previous block. So if I want to give my 1 Coin to Morrus in exchange for something, I must create a new block that tells the ledger that says "The coin referenced in Block #12345 has transferred from Darryl to Morrus."

Because the blockchain is encrypted, updates must be made via decrypting the blockchain, making the update, then re-encrypting it and sharing the updated blockchain with other hosts. Those who use their computer systems to perform such updates are rewarded when they complete an update with the cryptocurrency hosted on that blockchain. This process is called "mining". The constant encrypting and decrypting necessary for a blockchain to function means that mining requires a lot of power, both in terms of processing power and in electricity. Because it is decentralized, multiple people can attempt to update the blockchain with new blocks at the same time, and must prove the amount of work they did updating the blockchain ("proof-of-work") in order to claim the reward in cryptocurrency.

As of January 10, 2022, the energy requirement for updating a single transaction on the Ethereum blockchain (the current most popular blockchain and the one most frequently used for NFTs) is 238.22 kilowatt-hours. This is about the same amount of electricity for a single transaction as used by a single household in the United States or Canada uses in an entire week, or around two weeks for Australia, France, Japan, the UK, or Spain. The power used by a single Ethereum transaction is almost double the power required to make 100,000 transactions using a Visa card (148.63 kilowatt-hours per 100,000 transactions or 0.0014863 kilowatt-hours per transaction).

Another model called "proof-of-stake" involves putting up a stake in order to begin work on updating the blockchain and be rewarded for that work. In short, someone mining for cryptocurrency on a proof-of-stake blockchain puts down a deposit of a certain amount of that cryptocurrency for the exclusive right to update the blockchain with a new block. This reduces redundancies in the updating process since only one person is updating the blockchain for a specific block at any one time and the claim is that it will reduce power consumption by 99.9%. The Ethereum blockchain (again, the current most popular blockchain and the one most commonly associated with NFTs) has stated that the blockchain will be moved to a proof-of-stake system in 2019. No, 2020. No, 2021. Wait, no, Q2 2022.

The reason this is moved back is that exchanges (websites that manage the trading of cryptocurrency and NFTs) charge what is known as a "gas price" per transaction, meaning every time you buy or sell cryptocurrency or an NFT, you must pay the exchange in cryptocurrency an amount to make up for the power consumption of that transaction. The gas price can vary based on the demand and the value of the cryptocurrency in question. As of February 11, 2022, the gas price for a single transaction on the Ethereum blockchain was the equivalent of US$77.83. On February 10, 2022, it was US$118.79. If Ethereum moves to a proof-of-stake system, this will also reduce gas prices significantly so the exchanges will not be able to charge as much money per transaction.

Another issue with cryptocurrency is that it itself has no value. Despite the word "currency" in the title, it is not technically a currency. It is a commodity and is traded like a commodity. That means the value of a cryptocurrency is based on the price that is currently being paid for that cryptocurrency. Because cryptocurrency trading is completely unregulated, this means there can be wild fluctuations in the price of a cryptocurrency based on the number of people buying or selling at any given time. So when someone says they have an NFT worth $X, what they mean is that it is valued at $X worth of cryptocurrency. If the value of cryptocurrency goes down, so does the value of the NFT.

Now, I haven't even said what an NFT even is. NFT stands for non-fungible token. "Non-fungible" means an item is unique, ie it cannot be replaced by an identical item. If I buy a poster of a piece of art, it is considered "fungible" because if I lose that poster, I can go buy another identical poster. However, if I go to a convention and get the artist to sign my poster, that poster is now "non-fungible" because that poster is now unique - no other poster was signed by that particular person at that particular time and place with that exact signature.

An NFT is a token that is stored on the blockchain that executes a "contract", or a small piece of computer code. In its common use, the token will represent a proof of sale like a receipt for a digital good. For example, an NFT would say "Darryl owns this post on EN World" and include a link to that post. To create that NFT, I must "mint" it by registering the NFT on the blockchain. This requires paying the gas price for minting the NFT. So every time you see an NFT out there, know that somebody paid somewhere between $50 and $150 to bring it into existence.

Because the blockchain is decentralized and because there are no regulations on the use of the blockchain, anyone can create an NFT saying pretty much anything. If I have an NFT that says "Darryl owns the Big Ben", it means exactly as much as buying a "deed" for Big Ben off of a shady guy on a street corner. There is nothing else other than my receipt proving my ownership because it's not backed up by any authentication saying so, like how with an actual deed to property the government will say "Yes, that person does, in fact, own that property".

Another issue with purchasing NFTs is that they are not hosted on the blockchain. The size of the data stored in the Ethereum blockchain ranges from between 500 GB to 1 TB and that is just for the records of transactions stored on that blockchain. To store all the images, sound files, video files, etc. would cause the size of the entire blockchain to skyrocket into hundreds of TB very quickly. So instead an NFT points to a link of the file instead.

Going back to the NFT of this post as an example, that NFT would not contain the entire text of this post but instead would only have a link to this post. If I sold that NFT and then later came back to edit the post by replacing all this text here with just the word "butts" (because I still have access to the EN World account that posted it), according to the blockchain, the person I sold it to would not own a detailed-yet-oversimplified explanation of the blockchain but instead a post that just says "butts". If the moderators decide this post violates the Terms of Service and deletes it, that NFT would indicate that the buyer was the proud owner of "404 file not found".

Also, the NFT does not verify that the person who created the NFT owns any rights to the NFT. Buying an NFT of a work also does not mean that you own the copyright to that work. So if I buy an NFT of a piece of digital art, the only thing I actually own is the NFT itself. The artist who created that art still holds the copyright to the art and can go to the hosting company (remember, the image isn't hosted in the blockchain but is just a random link on a hosting site, typically owned by either Amazon or Google) and issue a DMCA takedown request. Once removed, that link in the NFT is now broken.

So there's another scam that is far older than the internet called "wash trading". It is a form of artificially pumping up the value of something (artwork, stocks, etc.) that has been illegal in the United States since the 1920s. The way it works is I have a thing and go to Morrus and say "I'm going to sell you this thing for $100. Then you sell it back to me for $1000. Then I'll sell it to you for $10,000. Then you sell it to me for $100,000. Then I'll give you the $100,000 you paid me back." The end result is the same as where we started - I have the thing and Morrus has $100,000. However, I have a list of transactions that prove that every time I sell that thing, it goes up in value. So I can claim that this thing is currently worth $100,000 since I can prove it sold for that much. I can also prove that the value of the thing increases by ten times every time it is sold. But listen, I'm in dire straights at the moment and need money right this second, so I'm willing to sell it to you for just $50,000. I'm taking a huge loss here since it's worth $100,000 and it grows in value every time it goes up for sale so it'll probably worth $1 million if I auctioned it off right now, but I really need that $50,000 right this second so do you want to buy it?

Pretty much every single time you see headlines of an NFT selling for some absurd amount of money, it is a wash trade. Which, because the blockchain is public record, anyone can go look and see that yes, this NFT sold for $2.5 million worth of Ethereum, but the person who sold it transferred $2.5 million in Ethereum to the person who bought it just the day before. And it might not even be two different people, but one person using two different accounts.

Wash trading is also frequently used in money laundering. By pumping up the value of a thing, I can then "sell" that thing between myself and those I'm working with. So I use the money I earned through the illegal trade of black-market Kinder Eggs to "buy" a thing from a friend, then I sell that thing to a second friend (who then sells it back to the first friend) and, as far as my taxes and any legal records, I can prove that I earned my money by selling that thing and had absolutely nothing to do with smuggling illegal chocolates into the United States. Again, this is far older than NFTs and cryptocurrency (for example, if you ever go on Amazon and see that somebody's selling an out-of-print RPG book for $500, there is speculation that those third-party sellers are using Amazon's used book trade to launder money in exactly this same manner), but it is frequently done via NFTs and cryptocurrency.

Oh, and remember when I said that NFTs are actually little pieces of computer code and are typically used as proof of ownership? Well, they don't have to be. In fact, there's a new popular scam where somebody will just give you an NFT. That NFT gets attached to your account. You didn't ask for it or want it, but it's there now. If it's cluttering things up or you think maybe you can sell it, the second you try to transfer it out of your account, the code included in the NFT runs and transfers everything in your account to someone else. If you remember the whole "you stole my apes" thing from a few months back, this is what happened. And it's not just a one-off case so that now people are telling others that if you get a strange NFT and you don't know where it's from, just let it sit there so that it can't steal all your other NFTs and your cryptocurrency. Oh, and if you know anyone who works in information security and want to see what it looks like when they laugh so hard they can't breathe, ask them about this.

One more thing I should point out is that NFTs aren't actually a big thing. As of January 2022, only 400,000 accounts have ever owned an NFT and only 40,000 accounts own about 80% of all NFTs. So this is a niche within a niche within a niche of people who own things that they can "prove" are worth a lot of money and are trying to sell them to other people who aren't aware of how the system works.

And if any of this sounds familiar, it might be because you're thinking of the subprime housing market. Or beanie babies. Or 1990s comic books. Or pogs. Or baseball cards. Or the scheme between Eddie Murphy and Dan Aykroyd at the end of the movie Trading Places. Or the stock market bubble of the 1920s. Or the South Sea Trading Company in England. Or the Dutch Tulip market of the 1600s. ♫♪It's a tale as old as tiiiiime♪♫

Okay, I think that should work as a very basic, oversimplified primer on the blockchain, cryptocurrency, and NFTs. Remember, the reason this crap is so hard to understand is that it's made that way by design because the less you understand, the more you can be lied to and misled. Or maybe it's all fud because I'm a shill with fomo who's ngmi because I didn't btfd.

 

[eyeheartawk]

I'm still waiting for Chaosium to even acknowledge that they even have a huge PR problem out there right now. No official statement yet. I don't think it's going to go away.

 

[SAVeira]

I'm still waiting for Chaosium to even acknowledge that they even have a huge PR problem out there right now. No official statement yet. I don't think it's going to go away.

Same. I still cannot believe that looking at the current climate no one at Chaosium went this is a bad idea, we should not continue as NFT are higher profile and most people dislike the concept.

 

[Jfdlsjfd]

What more sells the danger for me is this: It is all a pyramid scheme. It's selling digital trading cards under the pretense they will appreciate in value because scarcity will convince a future victim to buy it off you at an increased price. They are all scams.

Are they? Because being totally virtual doesn't make it a scam. It's a scam if they're sold you as something else, is'nt it? What I haven't seen in text is how nft-sellers are marketing them. If they say "buy this tulip bulb and try to get rich with it by passing it on someone as gullible as you for more money despite having absolutely no intrinsic value (well, actually it could be a pretty flower)" it's not really a scam, even if it won't work for long. How are people duped into buying them?

 

[Crusadius]

You do after a fashion. The the NFT is buying proof of ownership of a specific piece of digital artwork. Just like I can buy a print of a Monet, I can buy a digital proof of owernship of a specific Monet digital print via NFT. All the NFT does is prove I own a specific version of said "digital print". Hell, it doesn't convey copyright, or even a license. The art itself isn't even included in the NFT, it usually includes information about a website. So, with the ethereal nature of the web I can lose all value from an NFT by having a website go offline.

The stupid thing is that you are buying proof of ownership of a thing, not ownership of the thing itself.

And the thing? You want to show it to someone then the technology they use (usually a web browser) will create a copy of it on their device so they can view it.... so then they have ownership of a copy of the thing without buying an NFT.

That is, NFTs are proof of ownership but not ownership of a thing that can only be displayed/shown to others by creating a copy because of how the internet and web browsers work.

 

[Abstruse]

Are they? Because being totally virtual doesn't make it a scam. It's a scam if they're sold you as something else, is'nt it? What I haven't seen in text is how nft-sellers are marketing them. If they say "buy this tulip bulb and try to get rich with it by passing it on someone as gullible as you for more money despite having absolutely no intrinsic value (well, actually it could be a pretty flower)" it's not really a scam, even if it won't work for long. How are people duped into buying them?

Those are two completely different scams. A pyramid scheme is where people who started or bought in early make more money that anyone who buys in later because they sell to the people below them in the pyramid. Which cryptocurrency completely is. Meanwhile, the Dutch Tulip was a speculator bubble (which is typically also a pyramid scheme). People who owned all the NFTs/Mint Condition Youngblood #1/shares in the South Sea Trading Company were the ones selling them. So they made all the money. And the people buying them off of those people made slightly less money. And the people buying off them made slightly less money. Meanwhile, the price goes up and the people who made them originally still have more to sell so they can take advantage of the increased prices. And it keeps going until somebody goes "Hey...wait a minute...why am I paying as much as a house for some tulip bulbs?"

Either way, it's a still scam. Doesn't mean it's illegal (there are a lot of scams that are perfectly legal), but it's still a scam.

 

[Crusadius]

Are they? Because being totally virtual doesn't make it a scam. It's a scam if they're sold you as something else, is'nt it? What I haven't seen in text is how nft-sellers are marketing them. If they say "buy this tulip bulb and try to get rich with it by passing it on someone as gullible as you for more money despite having absolutely no intrinsic value (well, actually it could be a pretty flower)" it's not really a scam, even if it won't work for long. How are people duped into buying them?

Fear Of Missing Out, plus selling it as belonging to a club. All it takes is a few people to fall for the scam. And then those who do are desperate to convince others it's not a scam else all their money has gone.