By Ripple recently announced XRP Ledger adoption by the Mintable NFT (non-fungible token) marketplace. Mintable is the NFT service that has attracted notable investors like Mark Cuban and hosts various NFT collectibles such as works of art, gifs, videos, and property deeds. According to Cointelegraph, an NFT representing a share of property in St. Louis auctioned using the marketplace for nearly $76,000.
If you go to the Mintable website and look at how janky the owning, minting and verifying process is, you’ll start to understand why this big Ethereum NFT storefront is thinking about jumping ship to the XRPL. At times, using the blockchain is like driving a car without power steering and suspension — it’s not a great experience on anything but a straight, perfectly paved road. Certain modifications and amendments coming to the XRPL will hopefully make the consumer-facing experience more seamless.
Minting and transacting with collectibles will also be much cheaper than on the Ethereum blockchain. With Ethereum collectibles and gaming, minting the token often represents a significant portion of the overall cost of the digital items. When I went through this process with the card game God’s Unchained, it cost 33% of a single pack of cards to mint the cards onto the Ethereum blockchain. Transaction cost problems haven’t improved and likely won’t until ETH moves to proof of stake. The XRPL should be able to provide a cheaper and more robust NFT experience using federated side chains than Ethereum based marketplaces offer today. If Ripple can get the timing right, the XRPL could steal this $54 billion industry from Ethereum.
In a recent discussion hosted on the RippleX developer channel, David Schwartz outlined the necessity for an expansive integrated NFT system native to the XRPL:
“The content that the NFT entitles you to with most NFTs doesn’t go on the blockchain. If I have an NFT that gives me the rights to some digital artwork, that might be 2 megabytes — you’re not going to put those 2 megabytes in the infrastructure layer, at least not today. So there has to be a whole infrastructure for publishing and storing the data. And then you need a custody solution, whether it’s a wallet, or a browser, or a viewer — some way for me to show other people my NFTs. There’s a whole ecosystem just in that custody layer.”
– David Schwartz at 21:00
With video games, the hosting element of NFT minting isn’t a big problem. The collectibles exist in the various game worlds. Sure, you can add an image preview or something like that — but people are paying for the cosmetic item to be applicable in-game in some manner. With Mirandus, the most valuable NFTs are in-game property deeds. There are a couple of problems with this, mainly that the game servers represent a point of centralization and give developers power over the value of a collectible.
The developers can functionally ban an NFT from interacting with the game servers, and the user will have little recourse if they’ve violated the EULA in some fashion. Oddly, a significant boon to the gaming NFT marketplace is also that the storefronts and the issuers are centralized. A user knows who’s minting the collectibles because they’re purchasing them from an official storefront. Unless a consumer goes deliberately off-road to a third-party store, the chance of buying a fraud is almost nothing. The NFTs are curated in some manner by the developers — and I think that’s what’s missing from storefronts that function like Mintable.
NFT Authenticity
Mintable allows anybody to mint an NFT, so the chance of fraud goes way up. There are already stories hitting publications about artists learning that their artwork has been tokenized and sold to users without their permission on rival storefronts.
Verification is the bare minimum an NFT storefront needs to be doing to protect its users. But I suspect that NFT storefronts, like the early exchanges, probably figured that their marketplaces weren’t going to be around long enough to risk being sued once the collectibles they’ve sold are proven forgeries, and the value drops to zero.
Whenever I pictured artists minting their work as an NFT, I never imagined it would primarily be videos and gif images made by middle-of-the-line graphic artists — I just never saw it that way. The Mirandus implementation, with its insanely overvalued $2.5 million dollar video game land deed, is way closer to what I want to see from the NFT space. I don’t know if that makes me an NFT elitist, but if it does — I don’t really care. The industry isn’t exciting to me now, and I’m frankly amazed that it grew to $54 Billion with such an ugly presentation.
Imagine what the NFT industry is going to be worth when someone slaps a presentable front end onto it, and your collectible art, games, movies, whatever, are stored and viewable on a wallet that integrates into the XRPL and pulls the appropriate media from something like a side-chain. However, if all we get out of Ripple’s NFT push is slightly faster transaction times, then we might as well take the whole NFT industry out back and put it out of its misery. Because as it stands now, outside of a few notable collectibles, it’s one of the scammiest aspects of Crypto tech I’ve ever seen. It almost makes the ICO craze look like a golden age.
I don’t think it’s a good idea for everyone to be able to mint collectibles. I know we can’t stop them — but it’s just an awful idea. It makes every potential NFT buyer have to double as an art appraiser and blockchain technologist because the sheer volume that users can put up on a “people” driven storefront is way more than any group of moderators can ever handle.
Scams are going to slip through the cracks, and people are going to get ripped off. There is an element of personal responsibility to this. Still, I think if you’re going to be an NFT storefront, you bear some responsibility in verifying who’s minting collectibles and selling them on your platform. Tracking who created NFTs should be easier on the XRPL implementation. Hypothetically using a system like GlobaliD, an artist can verify his minting address on the XRPL, and users should have some additional assurance that the work is authentic.
The prices on the Mintable marketplace range from reasonable to absurd. An autographed photo of Christiano Ronaldo (with almost no information about its authenticity visible on the site) is currently selling for 4150738208790.433 ETH, which is a dollar value so high that it would almost fill an entire line of text in this post. Who is going to pay them that amount of money? Hopefully, no one. That listing is far too expensive to scam anyone. The listings that are going to fleece users are the more reasonably priced works of art placed on a platform like Mintable without prior authorization by the artist.
The Ronaldo NFT is also from the Mintable gasless store, which a comment in a CNBC article states is a unique Mintable NFT tokenization methodology where there are no gas fees for minting:
So, we launched gasless minting in January, which means there are no gas fees. [The transaction on the blockchain does not happen until the NFT is transferred or purchased, at which point the buyer pays the fee. Traditionally, the NFT would be recorded on the blockchain immediately.]
The gas cost of the minting process, like the risk of owning a potentially worthless collectible, is passed onto the buyer. So there still is potential for cost saving improvements using the XRPL, but the RippleX investment feels a lot more like advertising than investing in anything of value.
Mintable does provide users with some information regarding the authenticity on some of the tokens they’re buying. This drawing of Hunter S. Thompson is listed for $97 by the seller Ottwork, who appears to be the Artist Joseph Ott.
A hundred dollars isn’t a huge financial risk to take, but collectors should still try to contact the actual artist to see if it is indeed his marketplace hosted on Mintable.
Going back to the Ronaldo collectible, the Mintable FAQ features a section on how to determine whether the NFT you’re buying is legit or a fake. The first section of the FAQ states:
Immediately below that is this:
There’s nothing after that. The FAQ sidesteps the uncomfortable question asked in the title. How do I know that what I’m buying is legit and not a fake? The process seems to be showing how to verify that a storefront does in-fact own the item listed. It’s not showing a user how to determine whether a listing is fraudulent. I can’t think of a reason to have this bad of an FAQ section dealing specifically with item legitimacy on an art marketplace other than giving users a false sense of security. Maybe there’s something I’m missing here, but it seems very weird.
The seller has a five star rating and a “top seller” badge on his Mintable page, but when I go to the review sections for his store, there are zero reviews, and zero listed sales. Does that mean every user gets a five star review status by default? Can I trust any of the testimonials on this website at all?
If there is any curation on their sales platform, how did they miss such a weird listing? If it’s missing these, how well can it be doing with the more subtle ones?
Let’s go through the steps in the FAQ to try to figure out if it’s real. So, the FAQ tells us that store has a unique address that no other store can use; in this case the store is the Mintable gasless store, which, as indicated above, is their method of minting an NFT upon purchase without the creator having to pay the transaction cost. The Mintable gasless store currently lists 447,469 Items for sale.
The store address and the token ID match what is listed in the item metadata, just like their FAQ indicates, so great, it looks like the item is “legitimate.” But it just happens to look like this other collectible you can buy on Amazon UK for £9:
Obvious scams aside, I don’t understand the draw to collectibles like this. Maybe this is one of those “I’m too old for this” situations, but I don’t get the point of owning an image where the media aspect of it isn’t immutable or stored on the blockchain.
The idea is interesting in the gaming space because you can take that string of numbers, plug it into a gaming server, and the server integrates it into the game. An NFT representation of a game item also has the potential to live far beyond the lifecycle of a game and can even be ported into other games if the art is popular enough. It’s not perfect property ownership, but you can take the NFT and do something with it. It’s not just a blockchain rendition of a popular YouTube video — which is just stupid, frankly.
Even though I find the idea silly, NFTs representing gifs, popular YouTube videos, and images stored on cloud servers have generated an industry worth billions. Will the value of these assets hold? Or will they drop to nearly nothing like some of the most shilled digital assets back in the ICO craze? It’s tough to tell, but I suspect most of these “collectibles” won’t be worth the transaction costs needed to give them away in the future (hence why the creator has buried the Ronaldo token in the Mintable gasless store). I do see potential for more curated lists of NFTs hosted by reputable marketplaces. But that doesn’t seem to be the current state of the industry. And I think that’s unfortunate because it has a lot of potential.
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