“My mom thinks I’m a scam artist”
September 2, 2024 12:14 AM Subscribe
At OpenSea, once the largest marketplace for NFTs, more storms have gathered. One of the most valuable private startups to come out of the incubator Y Combinator is now facing pending litigation from the Securities and Exchange Commission, a previously unreported “matter” with the Federal Trade Commission, inbounds from US and international tax authorities, heightened competition, accusations of gender discrimination, and employee attrition. Interviews with 18 current and former employees, as well as internal company documents and conversations with investors, artists, and other stakeholders in the NFT industry, illustrate how a startup inspired by cat JPEGs has morphed into what one former staffer called a “lite” version of Meta that seems lost between the cultures of Big Tech and crypto. from Sunk Cost [The Verge; ungated]
...that seems lost between the cultures of Big Tech and crypto.
Considering the Venn for those two are very nearly a single circle, I’m not sure there’s much of a “between” to speak of.
posted by Thorzdad at 5:06 AM on September 2 [2 favorites]
Considering the Venn for those two are very nearly a single circle, I’m not sure there’s much of a “between” to speak of.
posted by Thorzdad at 5:06 AM on September 2 [2 favorites]
In re Bitcoin, I was talking to someone who deals with elder abuse and fraud a lot, and according to them, Bitcoin is now the major vehicle for, basically, stealing and moving the money of frail elderly people and the associated crime. And not elderly billionaires, either, somebody's eighty-five-year-old uncle who never really understood computers and is still eking out his retirement in a little condo. Bitcoin and the fact that the banks find it cheaper to use fraud-friendly mechanisms and deal with the fines/fraud than to manage security.
Bitcoin will probably always survive because it's such a great tool for ripping people off. NFTs were a great tool for ripping people off but won't really last.
I've got to tell you, if you want to retain any kind of faith in humanity, one of the places not to investigate is elder abuse/fraud. Half the time it's people's kids, robbing their cognitively impaired mom or declining dad of $10,000.
posted by Frowner at 5:33 AM on September 2 [19 favorites]
Bitcoin will probably always survive because it's such a great tool for ripping people off. NFTs were a great tool for ripping people off but won't really last.
I've got to tell you, if you want to retain any kind of faith in humanity, one of the places not to investigate is elder abuse/fraud. Half the time it's people's kids, robbing their cognitively impaired mom or declining dad of $10,000.
posted by Frowner at 5:33 AM on September 2 [19 favorites]
But on the other hand, a Bitcoin is worth almost $60,000 today
But is it? Can someone with $60,000 worth of Bitcoin literally exchange it, today, for cash?
posted by tiny frying pan at 6:03 AM on September 2 [4 favorites]
But is it? Can someone with $60,000 worth of Bitcoin literally exchange it, today, for cash?
posted by tiny frying pan at 6:03 AM on September 2 [4 favorites]
But is it? Can someone with $60,000 worth of Bitcoin literally exchange it, today, for cash?
Yes, bitcoin is very liquid and you can buy and sell through mainstream platforms like Coinbase or Robinhood and transfer the money to your bank account.
posted by smelendez at 6:14 AM on September 2 [3 favorites]
Yes, bitcoin is very liquid and you can buy and sell through mainstream platforms like Coinbase or Robinhood and transfer the money to your bank account.
posted by smelendez at 6:14 AM on September 2 [3 favorites]
Well shit. Those people better do that fast, then. Before it really does tank.
posted by tiny frying pan at 6:26 AM on September 2 [3 favorites]
posted by tiny frying pan at 6:26 AM on September 2 [3 favorites]
Listen to your mom.
posted by tommasz at 6:38 AM on September 2 [2 favorites]
posted by tommasz at 6:38 AM on September 2 [2 favorites]
Was that directed at me?!
posted by tiny frying pan at 6:49 AM on September 2 [1 favorite]
posted by tiny frying pan at 6:49 AM on September 2 [1 favorite]
no
posted by ryanrs at 7:00 AM on September 2 [2 favorites]
posted by ryanrs at 7:00 AM on September 2 [2 favorites]
But is it? Can someone with $60,000 worth of Bitcoin literally exchange it, today, for cash?
One of my local convenience stores has a bitcoin ATM.
posted by warriorqueen at 7:29 AM on September 2 [2 favorites]
One of my local convenience stores has a bitcoin ATM.
posted by warriorqueen at 7:29 AM on September 2 [2 favorites]
NFTs always struck me as the crassest form of rent seeking. "Here's a worthless thing that we're going to add artificial scarcity to. You'd better invest now before it's too late!"
I did see a company that had found a real use for blockchain. They had an electronic token that held the ledger. You'd attach it to something you were shipping, and it got updated as various companies took possession of it. It's basically an electronic version of a shipping manifest, where if you have their tool, it's simpler than doing it by hand, and you don't have to worry about losing the paperwork. (And it doesn't require an internet connection.)
posted by Spike Glee at 7:44 AM on September 2 [11 favorites]
I did see a company that had found a real use for blockchain. They had an electronic token that held the ledger. You'd attach it to something you were shipping, and it got updated as various companies took possession of it. It's basically an electronic version of a shipping manifest, where if you have their tool, it's simpler than doing it by hand, and you don't have to worry about losing the paperwork. (And it doesn't require an internet connection.)
posted by Spike Glee at 7:44 AM on September 2 [11 favorites]
seems lost between the cultures of Big Tech and crypto
“Can we suborn the law, or just avoid it?”
posted by clew at 8:24 AM on September 2 [5 favorites]
“Can we suborn the law, or just avoid it?”
posted by clew at 8:24 AM on September 2 [5 favorites]
One of my local convenience stores has a bitcoin ATM.
Searching "ATM near me" on Google Maps gets me a whole lot of Bitcoin ATMs, but is missing a lot of real ATMs at things like gas stations and grocery stores. The bank near me doesn't even show up as "ATM here".
Also, I'm fairly certain that since a bitcoin is literally not based on anything real AND nobody's regulating it, the people with the most to lose on it have plenty of control over the price to keep it high until they're tired of it, which will probably be never since they make so much money off it now.
posted by AzraelBrown at 8:54 AM on September 2 [4 favorites]
Searching "ATM near me" on Google Maps gets me a whole lot of Bitcoin ATMs, but is missing a lot of real ATMs at things like gas stations and grocery stores. The bank near me doesn't even show up as "ATM here".
Also, I'm fairly certain that since a bitcoin is literally not based on anything real AND nobody's regulating it, the people with the most to lose on it have plenty of control over the price to keep it high until they're tired of it, which will probably be never since they make so much money off it now.
posted by AzraelBrown at 8:54 AM on September 2 [4 favorites]
→
I thought that was now Tether, aka USDT? Zeke Faux (Number Go Up) is pretty vocal about how horrific that one is
posted by scruss at 9:00 AM on September 2 [2 favorites]
Bitcoin is now the major vehicle for, basically, stealing and moving the money of frail elderly people
I thought that was now Tether, aka USDT? Zeke Faux (Number Go Up) is pretty vocal about how horrific that one is
posted by scruss at 9:00 AM on September 2 [2 favorites]
did see a company that had found a real use for blockchain. They had an electronic token that held the ledger. You'd attach it to something you were shipping, and it got updated as various companies took possession of it. It's basically an electronic version of a shipping manifest, where if you have their tool, it's simpler than doing it by hand, and you don't have to worry about losing the paperwork. (And it doesn't require an internet connection).This is a great example of how the bitcoin fetishists diverted so much money away from businesses which can actually succeed. What made Blockchain projects fail was the enormous resource demand and always-online network requirement trying to pretend that you could make a system where you didn’t have to trust anyone else. This devolutional libertarian pipe dream is unworkable for anything connected to the real world, and it makes everything too expensive to find adoption. What you’re describing is much simpler because all it needs to do is chain public key signatures from known entities together, which smart cards could do on tiny amounts of power at the turn of the century - replace a scrawled signature with one which can be read automatically, get a modest efficiency gain, and the cost of your support infrastructure is measured in pennies rather than millions. That’s useful but unfortunately it’s not what VCs want to fund since it’s a sustainable business rather than a wild gusher of cash.
NFTs were similar: there could be a modest value in a verifiable public ownership record but nobody is turning into a billionaire that way and, from their perspective worse, the money is mostly going to the artists rather than the platform owners. Clearly not a thing Silicon Valley could tolerate!posted by adamsc at 9:51 AM on September 2 [6 favorites]
What breaks my heart about all this shit is all the carbon they're burning for their blockchain algorithms is making life harder on the island of Yap. Where the blockchain was invented 400 years ago.
Everything they think is so original was invented and refined there.
posted by ocschwar at 10:37 AM on September 2 [4 favorites]
Everything they think is so original was invented and refined there.
posted by ocschwar at 10:37 AM on September 2 [4 favorites]
One of my local convenience stores has a bitcoin ATM.
These are a huge avenue for that elder abuse.
The Bitcoin ATM owner is getting a cut of the fraud run through their machines (10-20%!), and the business leasing out the space for the machine is getting paid, so everybody wins! (Except the actual victims of fraud, of course.)
posted by jimw at 10:46 AM on September 2 [4 favorites]
These are a huge avenue for that elder abuse.
The Bitcoin ATM owner is getting a cut of the fraud run through their machines (10-20%!), and the business leasing out the space for the machine is getting paid, so everybody wins! (Except the actual victims of fraud, of course.)
posted by jimw at 10:46 AM on September 2 [4 favorites]
well how else are the tech-reluctant going to pay their ransoms?
posted by ryanrs at 12:36 PM on September 2 [1 favorite]
posted by ryanrs at 12:36 PM on September 2 [1 favorite]
I did see a company that had found a real use for blockchain. They had an electronic token that held the ledger. You'd attach it to something you were shipping, and it got updated as various companies took possession of it. It's basically an electronic version of a shipping manifest, where if you have their tool, it's simpler than doing it by hand, and you don't have to worry about losing the paperwork. (And it doesn't require an internet connection.)
It kind of does require an internet connection for the companies who want to publish the updates and for the customers who want to receive the updates. Unless you mean they're effectively just writing their updates to the token's local storage and nothing's actually distributed or online, and it's just really equivalent to a paper ledger, in which case that's not really blockchain in any meaningful way.
posted by aubilenon at 3:37 PM on September 2 [2 favorites]
It kind of does require an internet connection for the companies who want to publish the updates and for the customers who want to receive the updates. Unless you mean they're effectively just writing their updates to the token's local storage and nothing's actually distributed or online, and it's just really equivalent to a paper ledger, in which case that's not really blockchain in any meaningful way.
posted by aubilenon at 3:37 PM on September 2 [2 favorites]
It kind of does require an internet connection for the companies who want to publish the updates and for the customers who want to receive the updates.
Used to be that you had to have a working phone line to get any business done in this country. Now you have to have a. working Internet connection. Not really a change.
And yes, blockchain methods can take a lot of friction out of the normal paperwork that comes with running a multi-stakeholder supply chain. They can also be used to drive down the price of processing and clearing financial transactions to the point where we could in theory have a working framework of micro transactions so we could pay for the online content and services we use and not rely on surveillance capitalism.
But the whole thing has tech bro cooties which make it unusable.
posted by ocschwar at 5:03 PM on September 2 [3 favorites]
Blockchain is one gigantic friction machine.
It's like using paperwork but the papermill produces one sheet per tree.
Someone's going to have to pay for that friction. For that reason and more, the blockchain will never ever be good for the things it's supposed to be good for. Worst possible solution for micro transactions, logistics, payments...all of it.
posted by UN at 6:59 PM on September 2 [3 favorites]
It's like using paperwork but the papermill produces one sheet per tree.
Someone's going to have to pay for that friction. For that reason and more, the blockchain will never ever be good for the things it's supposed to be good for. Worst possible solution for micro transactions, logistics, payments...all of it.
posted by UN at 6:59 PM on September 2 [3 favorites]
Blockchain is a vile monstrosity when it's used to try to replace a currency.
When it's just a shared ledger of normal transactions (e.g. the delivery of a truckload of widgets), it's perfectly fine, and better than old school paper in triplicate. It can serve the same purpose for logging the handover of 2.2 cents from a fan to a web comic artist. If not for the tech bro cooties. Which I admit are more toxic than ringworm.
posted by ocschwar at 5:58 AM on September 3
When it's just a shared ledger of normal transactions (e.g. the delivery of a truckload of widgets), it's perfectly fine, and better than old school paper in triplicate. It can serve the same purpose for logging the handover of 2.2 cents from a fan to a web comic artist. If not for the tech bro cooties. Which I admit are more toxic than ringworm.
posted by ocschwar at 5:58 AM on September 3
so then what does the 'blockchain' part add?
posted by ryanrs at 9:41 AM on September 3 [1 favorite]
posted by ryanrs at 9:41 AM on September 3 [1 favorite]
When you get the shipment of widgets, the signature of the trucker comes with the signature he got in the loading bay, and you know it really did come from that loading bay. This isn't some big world changing thing. But it makes it easier to put together a supply chain, and it makes auditing the normal paperwork that comes from all this easier, and finally it removes a lot of temptation to try any fraud.
posted by ocschwar at 9:49 AM on September 3 [2 favorites]
posted by ocschwar at 9:49 AM on September 3 [2 favorites]
but blockchains seemed to have the exact opposite effect in finance
reducing fraud, improving paperwork and auditing, really?
posted by ryanrs at 9:58 AM on September 3
reducing fraud, improving paperwork and auditing, really?
posted by ryanrs at 9:58 AM on September 3
Does a Postgres DB not also fulfill this function of record keeping for delivery?
posted by snwod at 10:01 AM on September 3
posted by snwod at 10:01 AM on September 3
but blockchains seemed to have the exact opposite effect in finance
People with nothing but fraud on their mind will try to do fraud with everything.
Working stiffs who just want to get their tasks done, if told "this crypto magic pixie dust will flag any shortcut you might be tempted to take", will be less likely to try anything.
Does a Postgres DB not also fulfill this function of record keeping for delivery?
Whose DB? How much do you trust the DBA? If the DB holds authentication signatures from every stakeholder that you don't have to completely trust the DBA, then guess what: the DB is a blockchain.
The Yap Islanders memorize a poem for each of their stone coins, detailing the transaction history for each one. The algorithmic hash for it is not the most secure: the poem has to scan in Yapese and be in rhymed iambic pentameter. But Yap is a small island and a high trust environment, and that's just enough to keep everyone on the up and up.
This isn't new, and isn't earth shaking. But it also isn't inherently cursed.
posted by ocschwar at 10:41 AM on September 3 [2 favorites]
People with nothing but fraud on their mind will try to do fraud with everything.
Working stiffs who just want to get their tasks done, if told "this crypto magic pixie dust will flag any shortcut you might be tempted to take", will be less likely to try anything.
Does a Postgres DB not also fulfill this function of record keeping for delivery?
Whose DB? How much do you trust the DBA? If the DB holds authentication signatures from every stakeholder that you don't have to completely trust the DBA, then guess what: the DB is a blockchain.
The Yap Islanders memorize a poem for each of their stone coins, detailing the transaction history for each one. The algorithmic hash for it is not the most secure: the poem has to scan in Yapese and be in rhymed iambic pentameter. But Yap is a small island and a high trust environment, and that's just enough to keep everyone on the up and up.
This isn't new, and isn't earth shaking. But it also isn't inherently cursed.
posted by ocschwar at 10:41 AM on September 3 [2 favorites]
Blockchain, for things like logistics and art sales, is in an uncanny valley where it approaches something that sounds reasonable, but each individual feature doesn't quite do what it's claimed to do.
Authenticity and fraud prevention is imo the most obvious area where I don't see it doing anything for me. The question "are these the widgets that I should be receiving into my loading bay?", in the fraud sense, doesn't get resolved better than using other shipment tracking systems. What use case are we trying to solve? False widgets anyone can drop into a box. The blockchain doesn't jump out and arrest the fraudster. Same with artworks.
Mark Zuckerberg had to invent himself an entire metaverse to make the system reasonable. If only physical products were virtual products, we wouldn't have this issue.
For logistics... If a company is worrying that their provider is sending them fake database and shipment info, lol. If you can't trust them to handover the package you ordered and they're giving you fake data, but blockchain is going to force them to be, you know, not criminal? Yikes yikes. You may want to look into a chain chain, not a blockchain.
posted by UN at 12:57 AM on September 4 [1 favorite]
Authenticity and fraud prevention is imo the most obvious area where I don't see it doing anything for me. The question "are these the widgets that I should be receiving into my loading bay?", in the fraud sense, doesn't get resolved better than using other shipment tracking systems. What use case are we trying to solve? False widgets anyone can drop into a box. The blockchain doesn't jump out and arrest the fraudster. Same with artworks.
Mark Zuckerberg had to invent himself an entire metaverse to make the system reasonable. If only physical products were virtual products, we wouldn't have this issue.
For logistics... If a company is worrying that their provider is sending them fake database and shipment info, lol. If you can't trust them to handover the package you ordered and they're giving you fake data, but blockchain is going to force them to be, you know, not criminal? Yikes yikes. You may want to look into a chain chain, not a blockchain.
posted by UN at 12:57 AM on September 4 [1 favorite]
Authenticity and fraud prevention is imo the most obvious area where I don't see it doing anything for me. The question "are these the widgets that I should be receiving into my loading bay?", in the fraud sense, doesn't get resolved better than using other shipment tracking systems.I generally think you’re right but there is a slight gain possible here: if you’re using signatures from a Yubikey or phone secure element, it makes it harder for that hypothetical corrupt DBA since they can’t just fake the delivery guy’s ID. The problem is that the marketing guys love to jump from there to “we’ve solved supply chain security” because that’s what tech VCs want to hear, and they leave out the other 95% of the problem: verifying that your pristine chain of records has any bearing on the physical world. I solidly class this in the category of startups sabotaged by hyper growth dreams – anyone who’s thought about the challenges knows that the hard parts are things like verifying that what a tag is attached to really was what the label claimed, and that nothing happened to it later, etc. but investors don’t want to hear that you’re hiring QC staff and auditors because that doesn’t scale profits exponentially, and the result tends to be a lot of failed ledger experiments because nobody wants to invest in a merely modestly profitable business anymore. I’ve heard of a few people trying to pivot into something viable (better logistics software isn’t a bad idea) but I doubt their VCs are happy with that.
posted by adamsc at 9:50 AM on September 4 [3 favorites]
"We were promised flying cars. Instead we got 140 characters."
Yeah, that is a problem with tech VC culture. And it's quite a contrast to 150 years of American entrepreneurs getting pretty rich patenting minor improvements in production processes.
posted by ocschwar at 12:56 PM on September 4 [1 favorite]
Yeah, that is a problem with tech VC culture. And it's quite a contrast to 150 years of American entrepreneurs getting pretty rich patenting minor improvements in production processes.
posted by ocschwar at 12:56 PM on September 4 [1 favorite]
VCs can't make money from minor improvements and other modest business changes because they have too much money. If Andreessen Horowitz was managing $100M in assets, they could invest in smaller, real-er tech innovations. But no, they have to invest $40B, so it's gotta be some insane huge industry-changing thing, otherwise it's not worth their time.
They'd spend their money smarter if they had less of it.
posted by ryanrs at 9:09 PM on September 4
They'd spend their money smarter if they had less of it.
posted by ryanrs at 9:09 PM on September 4
I would just like it if the business pundits who didn't understand the tech of NFTs but hyped the shit out of it would have a moment of introspection and humility at how they got sucked in by the glamour of seeming rapid wealth.
posted by i_am_joe's_spleen at 9:47 PM on September 4 [1 favorite]
posted by i_am_joe's_spleen at 9:47 PM on September 4 [1 favorite]
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