The one thing that I don't think is a concern here is fungibility. There are a number of minor, more annoying downsides, but I think the fungibility one is not consequential at all really.

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Exactly. If a jpeg can take down ₿itcoin, we’ve got ₿igger problems.

My point is that those creating these believe they are affecting fungibility. They are essentially saying these sats come at a premium. Under their own definition they undermine what they believe gives their “collectibles” value in the first place. It’s like using concrete from your basement to build a second floor.

Ah, I see the analogy. Yeah from their perspective they see that as the point.