There’s absolutely no reason for that to be decentralized, only one party can honor the tokens anyways. Like most things crypto they don’t actually make sense for anything.
What does it even mean? Let's say I buy a NTF $1000 and get a digital copy, what prevents me (barring legalities) to perfectly duplicate it and massively redistribute it (not the token, the distributed supposedly high quality file) for a fraction of $$$ and turn a profit (because since it had such a high price it must be in high demand)? The question is not about the legal consequences but about the thing you own: of you have one original painting you have only one, it's quite hard to exactly duplicate it for resale.
I may be naive (the dropbox-is-just-rsync kind) but I've yet to see a tangible explanation of a use† of CryptoArt/NFT that could not be done with `xxd -l 128 -p /dev/random` and PGP[0].
† No. "being in the blockchain" brings absolutely nothing (except burning watts). If the author wants to reissue anything he readily can. You. Just. Own. A. Number. I also hear some picture the author getting a cut of resales of the token, which is even more crazy when you manage to entertain the thought while trying to keep a straight face.
The file is usually publicly accessible, why would anyone give you money for something they can just download?
Not too different than paying $4.5M to have a dinner with Warren Buffett [3].
[1] https://www.coindesk.com/twitter-ceo-jack-dorsey-is-offering...
[2] https://en.wikipedia.org/wiki/Justin_Sun
[3] https://www.coindesk.com/trons-justin-sun-finally-gets-4-5m-...
And what does the existence of an NFT allow you to do with respect to that bundle fo rights you bought that couldn’t already be done by having someone write down a rights assignment on a piece of paper, sign it and hand it over to you in exchange for some consideration?
1. That you paid a certain amount for the certificate.
2. That there will never be another certificate for the same thing, from the same brand of certificates (e.g. "Valuables BY CENT").
Pretty much exactly like owning a baseball card, then.
Further, I don't understand how this works in music/art. Grimes' copy of her music is issued on Nifty Gateway, but isn't that art only valuable as long as users assign value to the Nifty Gateway platform? What stops another art blockchain from becoming more desirable/valuable and creating a NFT of Grimes' art there? Doesn't that erode the value of the original NFTs?
What am I missing here?
How many "brand of certificates" are there now, and what is the barrier to entry?
I suspect 1) several and 2) low.
Also, how is "there will never be another certificate for the same thing, from the same brand of certificates" technically enforced?
A Merkle chain[0] append-only ledger contains a transaction minting the certificate, and the consistency rules for that Merkle chain mean that any extension of the chain which mints another such certificate is not valid (the same as a extension that spends money from a account with no money in it is not valid).
0: technically a blockchain specifically, but that's not actually relevant
The enforcement, interestingly, is more traditional; the owners of the "Valuables by CENT" trademark can use existing legal structures to prevent anyone else using that name.
Meanwhile the NFT is digitally linked to the Valuables by CENT smart contract on Ethereum, which will presumably have an 'author' property attached to it, set to the string "Valuables by CENT".
Ah, so they pinkie swear not to do it a second time?
Your average blockchain was founded recently, and have a lot less to lose taking the money and running, or popping up again under a new name, for a second go at the same shtick.
And one should be happy to control the receipt of their purchase of imaginary goods? Ok.
https://medium.com/treum_io/on-chain-artwork-nfts-f0556653c9...
Which the ARTIST has decided is a digital certificate for the price of art.
Just I could make a duplicate of the supreme brick, my duplicate wouldn't have as nearly much value if I tell people it is a duplicate. Supreme could sell bricks again but they probably won't. There's nothing physical that's stops them but there's still an implicit agreement between artist and buyer.
I may not wish to buy own a supreme brick, but I can at least understand why people find it valuable.
Jesus Christ Mary and Joesph, what is the name of all things pure and holy...
Look, I get it outside of the money laundering scheme to modern art, throwing around how rich you are by buying "stuff". I get it. Tiny pecker syndrome. But let's stop and remember that Rockefeller and Carnegie, the OG capitalist titans, were dick measuring by donating their money. Sure "to the arts"... at least they were building halls and museums. They participated in some solid currency velocity that helped pay the wages to construction contractors. Still, they were assholes, but a lot better than just shoveling money between other rich cunts as a form of showing off.
Basically, if Token == Intellectual Property ownership then it makes sense.
This would mean if a creator, say a musician wrote a song and transferred the NFT and it became a wild success in the future, the owner would earn profits from the investment, but so too would the content creator receive the mentioned dividends proportional to the value.
Why is there no global market place for reselling digital event tickets? Certainly Ticket master and the other retailers could agree on an open standard protocol, pay for a centralized clearing house, and create a digital market place. But they don't. And they don't because it isn't in any of their local interests to maintain such a thing.
This problem, which is fundamentally social and economic in nature, is what is solved by smart contracts. It allows the creation of a public commons, not one that technically couldn't exist, just one that no private actor is ever incentivized to create.
There are plenty of major concerns here, like how security and access are physically enforced if there are no official organizers or designated volunteers, but in theory you could maybe distribute a phone app so everyone is automatically scanning for unauthorized people, and just rely on physically capable attendees and police to deal with potential security incidents. Still probably a recipe for utter Fyre Festival-esque disaster and lawsuits in many cases, but feasible in theory.
Digital tickets tied to digital identities that can only be transfered at market price. That's not a difficult smart contact to create.
It should be noted that private keys can be shared if the owner wishes. In the case of using NFTs as event entry the event organizer would still need to keep a record of which NFTs have been used already for a given event because the wallet can be shared. Third party services will almost certainly pop up to fill this need.
This could be enforced for real-life events by handing out a wristband with a GUID QR code to the first person to demonstrate they possess the private key that owns a particular ticket token, then never handing anything out for that token again, and also triggering an alert if the same QR code is ever seen on more than one person (to mitigate "pirates" who might offer identical or similar-looking wristband material and "replay attack" with an existing assigned QR code).
There are probably other attacks I'm missing (including obvious existing stuff like people just sneaking in and evading wristband checks), and there are lots of questions about whether an NFT or decentralized blockchain is a smart idea for a given live event, but from a security perspective I think it should probably be feasible if an event organizer does decide they want to do it for whatever reason.
However, there are other analogues that I think are much less feasible or perhaps totally infeasible. There are some NFT... apps? platforms? companies? DAOs? that are providing some service where an NFT grants you access to something like a restricted Discord server. Even aside from how valuable or sensible that may or may not be, there's absolutely nothing stopping a token-holder from just sharing their Discord account email and password with as many people as they want. The platform and the Discord servers would have no idea if anyone's doing this and how many people could be sharing any given account. (Discord employees could potentially detect some cases but I doubt they'd play any part in this.)
For a real-life physical event, someone can't just copy your body and make it a shared proxy for pirating, but any NFT ticket use case short of in-person events is probably often just going to rely solely on the goodwill of people to not abuse/pirate things, and we all know how that goes - especially in anonymous online communities.
The rubber-meets-the-road real-world crossover part is where NFTs and "Web 3.0" in general tends to become really shaky. I'm still mildly optimistic about it in the long-term, but I think a large percentage of existing use cases are going to fizzle as pointless dead ends that are surviving purely based on flavor-of-the-year hype and fad waves. Things are obviously stuck in one such fad right now.
This is quite close to what unlock-protocol[1] did for several conferences pre-covid. Overall it worked, though there are some key difficulties: gas prices make interesting on-chain things too expensive for most people, and wallet ergonomics aren’t great for this sort of thing.
(I am a former unlock-protocol employee)
If there was an mmo framework that is shared between different games, I guess. But even then, why have a universal currency instead of just making it framework/platform specific? It's less work and is all handled in a fast centralized DB. At that why create the extra work of PoW or PoS or whatever algorithm solving process it'll use. currencyAmount += tradedAmount is way easier and makes more sense on the game dev side.
All these anti NFT arguments amount to is, "This is solutionism at its finest, but people already bought koolaid in bulk...so enjoy the show."
Even then, there are still a lot of questions: what makes the d-game actually interesting/novel/unique/fun and an appropriate, creative, and clever use of a decentralized blockchain.
And although I mostly agree with this essay and the Medium essay it's referencing about environmental impact, I do think NFTs have some potential use cases outside of games, art, and bilking greedy people. I think those use cases just have to be a little further along the "blockchain from end-to-end" spectrum.
Remember that crowdfunded, over engineered juicer? It was some $400 and claimed to do like 100 pounds of force on a pre-juiced juice packet to squeeze into a glass for you. Some other article showed you can just squeeze these packs by hand into your glass with barely any force. This was "the Keurig" of juicing.
Total shit show of over engineering and solutionism.
I see the same thing with crypto and NFTs currently. Everytime I have this discussion in person, I always say that I do believe there will be a viable digital currency of some sort in the near future. The current gen of tech has proved the want, which is important, but now a real how is needed along with commonsense.
Like, theres a real want for an easy to go, healthy juice. Just bottle it and sell it that way. Why go through the extra step of a juicer if the shit is already juiced. I won't doubt their drinks were good. But they got caught up in solutionism gimmicks. Digital currencies are caught up in the blockchain gimmick.
Yet your two sentence explanation is the most comprehensive.
NFTs enable the possibility of a market that is orthogonal to the channel that distributed the token.
The viability or existence of such a market is not guaranteed, but the likelihood that one could emerge at all has gone up thanks to the novel properties of NFTs.
Mark Cuban talks about this regarding dallas mavericks tickets. Suddenly the ticket creator can still benefit from scalpers buying everything. Or, you can set the next sell price to be limited to only 10 percent more. etc.
There is a reason for artists and musicians to move to NFTs as well, as royalty is built in. See kings of leon releasing their album as an NFT.
Well when you buy a ticket from ticketmaster you can’t exactly dictate what features they offer through their platform...not to mention ticket master is a 3rd party service that they take a massive cut.
blockchain is cutting these 3rd parties out in these use cases, allowing the event holders to easily mint the admission tickets and users take advantage of peer to peer open source technology. Meaning easily trace the tickets and buy/trade/sell without relying on Ticketmaster.
The secondary markets in ticketing exist because there's an excess of demand and entities who can exploit access, speed, or technical know-how for arbitrage. Blockchain ticketing companies don't fundamentally change that statement - they enable it.
No one likes Ticketmaster - but to call them a 3rd party service that takes a massive cut is inaccurate. Ticketmaster is owned by Live Nation, which usually owns both the venue and the artist's tour schedule. And owns the primary and secondary ticketing sales. So Ticketmaster is usually the first, second, and third-party in ticketing.
Blockchain doesn't magically fix this. It doesn't change the deep relationship Live Nation has with labels and artists, their fodness for excluding artists who play at rival and independent venues, their habit of defining contract requirements that can only be fulfilled by Ticketmaster software...
Blockchain is solving all of the wrong problems in ticketing. I don't need a distributed, trustless ledger of who owns a ticket when all of them are issued by and redeemed at the same location. The only real reason to push for blockchain in ticketing is to help scalpers hide what they're doing.
I don't buy "excess of demand" as being fundamental, though, except in the most technical sense. Imagine a super niche event, where the organizers know there are exactly 200 fans on the entire planet, and they offer that many tickets on sale. It still makes sense for a random scalper to take a loan, buy all 200 tickets, and resell them with a markup. It would still make sense if the organizers offered 300 tickets, i.e. greater supply than demand in terms of heacount! A scalper could still come ahead buying all 300, selling 200 at a high enough markup, and feed the remaining 100 tickets to a cat.
I think scalping (arbitrage) can occur in any situation in which the supplier isn't charging the maximum the market can bear (perhaps that's what is meant by "excess of demand" and I'm missing some technical definitions here).
[0] http://www.personal.psu.edu/dxl31/econ2/pizza_market.png
Is this an argument? We're talking about ticketmaster moving to a chain, why can't we talk about them moving to a cheaper better service that isn't based on crypto?
And besides, crypto isn't free. The network takes a cut. Doesn't it cost like $20 to perform a transaction right now?
So basically, decentralisation doesn't serve the vendor, only the consumer.
Those two things are not a given.
If you want to use your ticket to go see the event, use it. If you don't, simply do not go. If you do not want to go and want to recover your costs, sell it back to the venue at the purchase price.
There are people who happily pay $10,000+ for an Italian purse. There are people who are happy with a $10 Chinese knock-off.
There are people who happily pay $2,000 for an Apple laptop. There are people who are happy with Linux on a $100 machine from Goodwill.
There are people who go outside to feel the breeze. There are people who are happy with a fan.
I don't understand NFTs at all. But I have to remind myself that often value is subjective.
I feel like NFTs today are roughly where altcoins were in 2012. Lots of good fundamentals to the ideas, but most of the implementations are really missing the mark. Whatever the NFT equivalent of Ethereum, Zcash, Sia, etc is... it's not here yet. And it may yet be a year or two until it first appears.
On the other hand, the morality of NFT's is already mainstream while the usefulness is an open question that's leaning toward "not really".
This is the weirdest sentiment that I see all the time on HN, but enough people express it that I have to accept it as both widespread and genuine.
However, I think that if you think $2000 US for an Apple laptop isn't the best value for money you can get on the laptop market, then you're either very good at finding bargains or completely bonkers.
Yes, macOS is no longer for developers. Yes, for extreme workloads I use my linux ryzen7/2080ti or the cloud rather than the MBP. Yes, they had a strange couple of years with the keyboards.
But honestly, they're the best hardware hands down. Not just the best absolutely, but the best per dollar. And personally I love macOS, but I'm just a manager these days so I guess I would, right?
It's rock solid running win 10 pro, has extremely low DPC/ISR latency for ASIO music recording with Ableton, can chew through blender modeling with cycles, and I can do all my dev work in vs2019 and intellij with zero hiccups.
I challenge your assertion that you can't find equivalent if not superior hardware per dollar as what apple offers. Maybe you're just not looking hard enough.
FWIW, I used my Trump Bumps to buy a new MacBook for my wife, and I plan to use my Biden Bonus for a new MacBook for me. (Assuming Apple releases one with a large enough screen in the next six months.)
An NFT is really just a digital autograph. Not even really an autograph, isn't it a cryptographic signature? Which would surely need to be random by nature, so the artist can't even do something unique with that. It's external to the work itself.
You can say this about literally every non-productive asset, including NFT's real-life counterparts eg. painting or trading cards.
When imaginary cryptohashes have limited supply, it's kind of pointless, or at least there is nothing good for the buyer or society.
Furthermore digital assets undergo similar attrition to physical goods through people losing access to their goods. The BTC block chain is notorious for its forgotten wallets.
The same can be applied to physical goods as well. Why do people pay millions for the original painting, even though they could probably get a replica that's identical to the naked eye for much less? Clearly they're interested in more than it being "as good as the original".
I'm a dev at pruf.io and this is one of the many things our platform is designed to do.
What scares me is that there are artists who I don't think understand how scammy this is. They've drunk the kool-aid and accepted the handwaving "you don't need to know how it works, just that it exists" explanations. Creators who wanted to make an honest dollar but ignorantly perpetuated the scam could find them themselves in hot water.
To be fair, if they're doing it honestly the value proposition is "Support the artist and get bragging rights for having done so!", which doesn't become a scam (or at least any more of scam, depending on your view of bragging rights) just because there's a scammy secondary market that the patron doesn't necessarily have to participate in.
I think there is a case to be made for NFTs, but would also not be surprised if you're right that it ends up with mostly bag holders.
The only thing you "own" in the physical goods sense of precluding other people from using it, is the NFT itself. It is exclusively assigned to you, other people can't conceptually say they own it.
Another example of how that divide manifests is how would someone show off their NFTs? Art is easy, hang it on the wall conspicuously with canister lights. You could do the same with an NFT piece, or you could put it on your profile or something, but anybody can do that. You're not showing off your NFT, you're showing off the art. Your NFT is just a jumble of cryptographic data. It has to be random for functional reasons, I presume, so it's not like the author can make your NFT a piece of art in and of itself.
NFTs are revolutionary for digital assets and allow for something beyond the world of licences as well as much greater scaling.
Fads like CryptoKitties are completely irrelevant to the core tech, just like Bitcoin is in the grand scheme of things irrelevant to the potential of block chains.
ETH NFT refers to the smart contracts that you would use to digitize ownership of a house or any other (physical or financial) unique asset that you might trade.
You can nest an NFT under an ERC20 token, too, so that you can sell partial ownership tokens in your NFT.
Of all the use-cases in crypto, I think digitizing ownership is the one that seems most likely to be actually used for a non-trivial volume of non-speculative trading.
When it comes down to it, the entry on the local tax rolls or property registration office is going to be the one that counts.
NFTs are the digital equivalent of a vehicle title, that's the strongest usecase (proof of ownership), IMO. I'm not too keen on the collectibles/art usecases, they're probably the easiest/low-effort ones.
ex, if the law requires an actual notarized handwritten signature to transfer ownership, what you and I do on the blockchain will simply not count when it comes down to it.
If I accidentally burn the NFT that represents ownership of my house I'm definitely still the owner of the house, there's no world where a government would shrug and say "I guess nobody owns it anymore, oops"
That value does not disappear if the state + courts also build in processes for over-ruling the on-chain owner of an object and forcibly transferring it to someone else. The core value here comes from how much easier it is to clear all of the red tape in a fully programmatic world.
Before I buy an NFT, I'll have to check the GovLedger anyway to make sure that NFT is actually that person's to sell, and hasn't got a lien on it or something else that means they can't actually sell it.
If the idea is the blockchain is permissioned and the state can choose which transfers to allow and can forcibly recover NFTs, why not just use a database?
Regarding liens, it seems simple enough to say that if someone does not own an NFT "free and clear", then they cannot transfer it "free and clear". It might even be a different NFT entirely (a "liened NFT," where the original un-liened NFT is held in trust by yet another smart contract, with limited or conditional ownership rights given to the lien holder.)
The reason not to use a database is interoperability. Any smart contract can transfer these NFTs according to infinitely nuanced scenarios, and only during disputes would a court need to get involved and forcibly transfer the NFT according to a judgement.
The typical case where all is not equal in finance is where currently parties transact via a trusted intermediary like a clearinghouse (who might take a 1% fee, say), and a startup wants to allow parties to transact directly, thereby capturing the fee as upside. Large financial institutions don’t tend to trust small startups that might implode any month, but they can (sometimes, it seems) be persuaded to trust a distributed ledger.
Suppose I die taking my wallet keys with me; how do my heirs inherit my NFT-ized house?
If the government is minting these NFTs and deciding which transfers are legitimate and which aren't, why are we bothering with all this?
Basically: at some point, an NFT will become separated from the ownership as recognized by the people who count (banks, governments, etc). Without a mechanism to reunite them, the NFT is not very useful; but if there is some sort of mechanism, it's really that mechanism that determines ownership, not the NFT and you might as well use a centralized ledger.
It’s important to understand that these tokens aren’t going to replace the existing legal system (much though the anarchist/libertarian wing of the crypto community might wish it). They just enable certain transactions to occur with lower overhead and time delay. This is about improving friction in the happy path, not providing new solutions for every conflict case.
Personally I don’t think there is a reason to put your primary residence one the blockchain (you don’t trade it that often). But it’s interesting for places where you might want to trade assets at higher frequency (eg micro loans, supply chain finance, etc) and maybe there is a real-estate trust angle too.
No they aren't, and least not until they're recognized by law as such.
I’m sure there are many asset classes where you can’t write such a contract but I don’t think your categorical rejection is correct.
Are you implying that laws should come before inventions/ideas?
So, let me get this straight: you have an NFT that represents the deed for a vehicle, but the law does not recognize the NFT as the deed for the vehicle... if you don't see any problems with that, boy do I have a bridge to sell you.
You have a piece of paper that represents the deed for a vehicle, but the law doesn't recognize the "paper" as the deed for the vehicle...(this during the time of clay tablets)
Was that clear? or do you still have that bridge for sale?
There are people who sell deeds to land on the moon (https://lunarland.com/), but they're worth little more than the paper they're printed on, because they have some of the same deficits in legal recognition that NFTs have. Those people have no more ability to will their certificates into having legal force than NFT advocates have.
In short, an NFT is little more than a trading card (representing only itself) unless a court would side with the possessor of an NFT against competing claims for whatever property it's suppose to represent (e.g. transferring ownership of the property/rights to party A using traditional means AND transferring the NFT to party B). If the court picks party A, the NFT meant nothing.
I made a point, which you missed and you're telling me that I missed your point? seriously?
I'm just telling you that this technology is suitable for doing the job of a paper-title, but in a digital way. Is it that hard?
So, it's made, and costs 150 a bottle. Why? Ostensibly, it's good scotch whiskey, and it's a limited run, 10 years in the making.
So why tokenize it?
Gamification.
Only people with the actual bottle can play.
Open it, scan the qr under the cap, then you can share the official tweet from posh-makers whisky announcing the opening of the bottle.... "that was us last night, good times all around!" maybe you get a 25 dollar certificate for your next limited run bottle. It's a social flex, and it's great publicity for the brand.
...and the remaining 237 bottles just went up in price. Fast forward a few years, and somebody has one of the last three bottles.... Which is mostly because he can actually prove he has one of the last three. Now its worth 270k.
This is supposedly the company the movie Ex Machina used for the CEO’s Jackson Pollock.
I’ve been tempted to get one from them. :-)
https://www.quora.com/Did-they-use-an-original-Jackson-Pollo...
I'm sorry, but I simply don't. Not trying to be contrarian, but reproductions bring me a very different joy and appreciation than provable originals. I agree some things in crypto are scams, but NFTs, in my opinion, have a really important function in some domains.
The whole things feels like a scam to me. Taking the best part about digital goods (that they’re non-rival) and attempting to hack on scarcity for the purpose of exploiting a psychological flaw.
The most charitable interpretation is that it's a way to reward artists for creating digital art in a new way.
The HN article for this comment thread shows the risk here though. If the monetary incentives become pushing these tokens, then the most successful 'creators' will be the people that can maximize getting people to pay for these dumb tokens. The incentives are bad and you end up with the 'artists' being mostly ICO style scammers.
It's like the corrupting influence of ads on media, tokens value will be a similar but different corrupting influence.
You could argue how is this different than monetizing anything? I think it's because of the pseudo-value/speculation driving people to spend more on the hope of a future return. That's the psychological hack of fake scarcity.
These tokens are already diversified beyond anyones control.
Tokens take that a step further and make it worse.
Incentives create the world. On one side you have Apple Arcade trying to align incentives for a better global outcome/end state. On the other you have in-app purchases, loot boxes, and NFTs - trying to maximize profit for the house.
A stone is a physical object, some stones are worth more than others.
You can call the fact that humans apply value to thing a scam but that would give you a suboptimal understanding of the world.
And only as long as people recognize your NFT claim to ownership as even being valid. Other people may view that brag as being as sad as someone bragging about their land holdings on the moon: https://lunarland.com/.
It's like jack dorsey selling an NFT of the first tweet compared with any random person trying to do the same.
Which of those rights are actually transferable?
What rights do you have in a tweet that you made in your capacity as an employee of a company?
What rights do twitter as a company have with respect to tweets? Or to impose restrictions on the ability of people to transfer rights with respect to tweets?
At least with cryptokitties, love em or hate em, the NFT was the character and the permission, so while anyone could admire your cat nobody but you could publish actions from it.
It seems like the obvious counterpoint is that perhaps all of these “collectible” scarce physical things which are bought and sold for huge amounts of money (art, coins, relics, etc.) are in fact being used simply as a way to identify a unique “token” that is good for generating hype among a group of people and exchanging value among that group because it has a story attached to it and isn’t easily counterfeitable. It’s pretty obvious that a decent reproduction of most of these things would deliver the raw surface aesthetic experience to the vast majority of interested people and would cost much less. For many famous paintings it’s easy to understand why someone would want a reproduction in their house for decoration. It’s less obvious to me why someone would want a reproduction of an old coin with a minting flaw, but perhaps that’s just me.
I agree re: rare wine and rich hobbyists. Bitcoin's value is much the same, although without the wine.
Everything Seth is saying about NFTs is true for every crypto coin.
In many worlds, image NFTs you own are displayed with special indicators that they are yours. You can print out a picture of the Mona Lisa, but its not going to have the same impression as the real painting.
Original Beanie Babies are worth a fortune.
This craze is happening because many people realize that at the least, there is sustained value in first-mover NFTs of various types. Before dismissing this as yet another craze or bubble, consider that a digital world where 90% of NFTs are worthless is no different than real life with commoditized art.
An anecdote,
I am an avid jazz record collector (vinyl). Every record I own is available to me on Spotify and I actually frequently find new records to purchase on Spotify (they have a great jazz selection).
Interestingly, or maybe not, I find that I listen to the records I own more than those I don’t even though I have access to so many more.
I also find myself having significantly more patience with the records I buy blindly than I would a random thing that comes on algorithm radio.
The point being, ownership creates psychological attachment which in turn creates some intangible form of value that I can’t quite put a number on but I definitely feel.
How? You don’t own a (digital) image. You own a token that references an image.
Everyone else can view the image and send it to their friends. But you have some token allegedly signed by the author of the image — who cares?
This is a pretty terrible system, though, as it's completely off-chain and not "Web 3.0" or decentralized in the slightest. The server has to store the "private" content in a private centralized database, so the server owners also can access the content, and any hacker could access the database and publicly dump all of the supposedly token-walled content.
It's just taking advantage of the fact that any computer can determine the Ethereum address that owns a particular token and can check to see if a message was signed by that address's private key.
I could imagine a future standard that could maybe integrate this into Ethereum proper, though I'm not sure if it's technologically possible.
There's no way to prevent someone from just publicly releasing the art, but one could imagine some system like the full resolution piece stored as a public key-encrypted blob in the blockchain which can only be decrypted by a token holder.
Maybe upon token ownership transfers the key could be encrypted with the token buyer's Ethereum address public key, though I'm not sure how or if it could work since I think the original content key would have to stored on the network in some fashion in order to later encrypt the key for token owners. So it might not be possible even in theory, though I don't know nearly enough about Ethereum and cryptography to say with any certainty.
It would instead be like owning a unique piece of paper with a unique number on it, which somehow corresponded to a picture of the autograph. Now the autograph portion is identical between you and anyone else (neither of you has a physical autograph); the only differentiator is your piece of paper. Where is the value?
In real life, people wear rolexes. Why? You and I both know that a casio can tell time just as well as a Rolex. I don't know the difference between one model of Rolex from another, but some may cost 10k and some may cost 20k.
To those deep in the Rolex world, the difference is huge. They can tell right away.
Why do people wear rolexes? A casio is lighter and easier to tell time. But a Rolex. That's status. You're not SAYING you're rich, but you signal you're rich. Big difference. The former, people will scoff at. The latter, people may be impressed. And if you're in the Rolex world and you own the top of the line Rolex? Those in the know are even more impressed.
How does this translate online? How can you signal status online? In centralized systems like twitter, you just look at followers. But what if... you just now made a twitter account to talk about something you love, and you have no followers? How can you signal status to people you talk to that you deserve some clout?
Enter something like cryptopunks. People in the cryptospace use cryptopunks as their twitter pic. Those in the know realize that one cryptopunk does not equal another cryptopunk. Maybe yours has red hair and only 2 percent of cryptopunks have red hair. Maybe you know all red hair cryptopunks command a huge premium and cost tens of thousands of dollars.
They can verify in your wallet that you own that crypto punk.
You can move from one platform to another, with no followers, and suddenly, you have digital clout.
Mull it over for awhile.
I agree - the problem with most NFTs at the moment is that you can't actually do anything with them, apart from trade them.
There are games coming out now (e.g. Goal Revolution[0]) where your NFTs' properties (and, by extension, value) change based on what you do with them (how you use them). If the NFT thing is going to have any future, it needs to follow this example.
I dot agree with this statement but perhaps it'll help you expand why you think this way. As the article says, you don't have to own the Mona Lisa to appreciate it's beauty.
When the sword is sold -outside of WoW-, how does it have value in another context? Can a Destiny character equip a WoW sword? (No.) Ok but what if the Destiny devs made an in-game Destiny item that was pegged to that WoW sword, and then the games all checked your inventory at login? You'd have to check the ledger -every time the item is used- or the player can just login, trade it away, and then stay logged in and continue to use it (use after sell, essentially).
If players can -already- trade items within the simulation where they were created, but we're not defining what it actually means to move an asset -between simulations-, what is the actual use-case here? That you can trade non-functional skins outside of the game? That's it? Why is that good?
First, I don't think the big use case is for items being traded between different games. However, a system like that is possible. Blizzard would be a good example here, since their games have a high degree of cross-pollination, and they frequently offer promotions that unlock similar items in several of their games at once. So, owning a Blizzard "magic sword" token might give you a sword item in WoW, another one in Diablo, and a sword card in Hearthstone, each adapted for its own game. This is a small use case, in my opinion.
I imagine that the big use case is for any game developer (indies especially) to leverage the marketplace without having to build one, or be locked into one provided by a single publisher/distributor. The game itself does not have to be p2p as you're suggesting. Game architecture would remain centralized, and would communicate with a blockchain where the tokens are stored.
The process might look like this:
1) A player purchases an NFT representing an in-game item issued by a wallet owned by the game developer.
2) The player sends that token to a smart-contract address, also owned by the developer, with a memo that identifies their player account.
3) The smart contract notifies a centralized game server, then sends the token back to the player's wallet.
4) The in-game item appears in the player's inventory, within the game.
There could be any number of steps involved, and the contracts could operate however you'd like. The token could be destroyed after a single use (like purchasing keys for loot crates in CS:GO) or used and traded any number of times. The game server would have to keep track of which player account controlled which token, and update players' inventories whenever the token changed hands.
One more thing - NFTs can be programmed such that creators receive an automatic royalty (a percentage of the sale lands in the creator's wallet address) whenever the item is sold on the blockchain, no matter who is selling to whom. This could be huge for indie developers, who would benefit not only from selling the original items up front, but also from the long-tail resale of such items between their players.
Why would the publisher behind Destiny care? Blizzard is the one profiting off the items. Each publisher would create their own mutually incompatible smart contract to maximize profits. Companies absolutely hate the existence of secondary markets. They want cash shop items to be tied to accounts so that every player has to rebuy the same items over and over again. It simply won't work except as an easter egg.
Players re-buying the same item is definitely profitable, but it may turn out to be more profitable in the long-term to allow players to freely trade items while taking a cut of each transaction as royalties. Also, as mentioned before, NFTs allow for single-use items. A game could provide all sorts of different items with different rules.
I'm like 90% certain that there are cross-game item unlocks in Blizzard games already.
> NFTs can be programmed such that creators receive an automatic royalty (a percentage of the sale lands in the creator's wallet address) whenever the item is sold on the blockchain, no matter who is selling to whom.
Why is that good? Who is it good for? Why would a game developer sign up for this? You seem to be under the impression that I have no concept at all of what NFTs do. The problem is that a multiplayer game server is fundamentally already a trusted third party and the incentives for gamedevs to use them are poor, while the complexities enormous. Boiling the oceans to produce a trustless ecosystem for asset transfer is a fruitless endeavor if those assets can only be reified inside of environments that fundamentally require trusted third parties.
You already need to have a trusted third party (the game server) in order to give any functionality to the assets. Once you've added that trusted third party, you've thrown away the key benefit of blockchains.
The trusted third party is effectively required to moderate custom assets in games; untrusted asset creation is an unchecked liability in general, and is expressly prohibited by the terms of many game platforms. If a player creates content that is hateful, then another player that is a child can download it, and if their parent sees that, the kid will say "I'm playing $your_game", and then the parent will raise a stink about how $your_game has $hateful content in it and $your_game exposed their children to that content. That sort of thing will certainly get your game delisted from the Nintendo or Sony stores. Even if you're only concerned with an unregulated PC market, it's going to be a hit to your sales.
If a child wanders onto a hateful website, the parent is going to say "the web exposed my child to $extremism", and then use parental controls to control what their kid can access on the web, but you cannot do that in a game. Sorry, you can't bring your $valuable_item in here because $other_player has it disabled in their content settings. You'd better believe parents are going to say "$video_game exposed my child to hate speech" and it's going to harm your sales.
Beyond hate speech, assets have to be verified by the game dev to verify their integrity; the asset has to be loadable and working without errors and without breaking the game. That's assuming there are zero vulns in the asset pipeline. Beyond merely being loadable, it should also conform to some guidelines so that the asset doesn't perform well for players with fast machines, but make the game unplayable for players with slow machines.
As for royalties: Steam Workshop already gives royalties to people who create assets (albeit at poor rates) and people already play that game. Why would I, a game developer, sign up for something that makes all of this worse, reduces my revenues, is massively more complicated, requires me to verify data against a blockchain constantly, AND increases liabilities? This is assuming you even -can- verify the data against the blockchain frequently. Even assuming you're using a blockchain with a read latency of zero, you're still performing i/o. You want to perform blocking i/o to an external datastore every single time a player wants to use an item? The only away around that would be to write a lock into the blockchain to prevent transfer with a contract and cache the ownership semantics, at which point you have completely duffed every single advantage a blockchain is giving you.
Let's say, hypothetically, that we ignored all extant games and ONLY considered new games. Again: if you're not moving an item between simulations, it's all for naught because the game dev can just implement a traditional inventory system more easily, and if you -are- moving an item between simulations, the spawning simulation and the target simulation need to be in agreement about what an item spawned in one simulation means in the other simulation. That alone is a terrifically difficult problem that NFTs do nothing to address. Few game devs would sign up for this, because it would mean that the -other- gamedev would be able to affect the balance of the economy in -their- game, potentially to catastrophic effect. It effectively ties the game economies together, but different games have fundamentally different economies with different mechanics. Who is in control of the spawn rate of assets? "You just make the asset be some random thing whose nonce is some thing that's made on the blockchain at a fixed rate determined by the blockchain itself" like CryptoKitties or whatever. Ok, fine. How do you issue a patch to alter spawn rates, balance the relative frequencies of different items appearing, or change their properties? If you -can't- do that, you can't balance your game. Balancing live game economies is -incredibly- difficult, you can't just hope to get it right on the first shot.
I completely agree with you on the boiling of the oceans. It's a problem that cryptos will have to solve in the long-term to be viable as any part of a green economy. There are a few projects that are energy efficient, but Ethereum and others have work to do. In any case, NFTs aren't specific to any one blockchain.
I think content creation and limitation is a separate issue, and not implicitly part of NFTs. You can issue a token representing a particular game object, with no ability for the player to customize or modify it. You bring up an interesting point though - there could be a limited, controllable level of customization available to players. Consider a smart contract that mints NFTs and allows certain attributes to be modified, which could affect the cosmetic or functional details of the in-game item they represent. You could sell a class of NFTs representing a certain sword, and players could pay extra for a golden version, or a version with infinite durability.
For Steam Workshop, I think you've identified exactly the issue. They control the marketplace, and set the rates. If it's more profitable for a developer to set their own rates/royalties, and it's easy enough to implement, and there are enough players willing to use NFTs (or a platform that manages NFTs for them) then we'll start to see developers use them. Marketplaces aren't mutually exclusive, so you could have some items on Steam, and others on blockchain. You could make certain desirable items exclusive to the platform that nets you the most profit.
I agree regarding difficulty of implementation - this is something that most developers won't bother with at the moment since it doesn't make economic sense, but as the ecosystem develops we'll likely see companies that provide a simpler abstraction layer for NFTs (perhaps even specializing in games). As the implementation costs drop, we'll start seeing adoption. This might take several years.
Regarding blocking I/O, I don't think it would work like that, just like it wouldn't work as p2p. A game server could poll the history of its smart contracts (or the abstraction layer provided by a service platform) every few seconds or minutes, and update its centralized database of items to match whatever transactions have occurred. All reads within the game would still be to its own database, and not directly from a blockchain.
This is being continuously disproved since decades by contemporary art.
* edit for clarity: what would be commonly considered technical artistic effort, although a large % of graphic designers would disagree with that as composition is a skill, and conceptual artists would disagree due to the thought put in (which imo feels post-hoc but hey ho)
So, it's not that being technically spectacular in some arbitrary "really accurately painted or drawn picture of reality, like a photo" way makes art valuable (photography effectively destroyed that a long time ago, sorry!). It's that it has some special significance. If that significance is more than personal, as in it has some historical/cultural significance, then it becomes valuable. There's no point to it, it's art. So w/r/t original subject, above reasons make me think twice about any knee-jerk cynicism I have toward it (which I do have, I just have to have an open mind)
You had me until this bit
Mama! Yes but ....
We say "Beauty is in the Eye of the Beholder", because it's true. There will be no accounting for a persons own taste or for what society finds fashionable today or over time.
If what you personally call Art and its story speaks to you then it is valuable. If others share that feeling then it is even more valuable. It's just that simple.
I personally like the idea of commissioning art like what big families did back in the Renaissance, but use Social P2P networks like what is already happening with customized digital Avatar makers/artists. NFTs have a role to play here equivalent to an old Renaissance painter signing the bottom of the painting, only now it's with the owner(s) and all future owner(s) signatures there for all to see.
AI can be trained to recognise and prefer beauty as well.
[0] http://www.bbc.com/earth/story/20150511-why-are-animals-so-b...
[1] https://www.independent.ie/entertainment/sir-david-attenboro...
How valuable is Jimmy Hendrix guitar pick? How valuable is a lok of Justin Biebers hair? How valuable is a book owned by Charles Darwin?
Of course NFT is a bubble just like about every other thing humans create, but humans will always attach value and meaning to dead things even digital ones.
And so NFTs can be used for many things including allowing people to buy something overhyped that will depreciate in value.
That's all good, the more of this the better.
TCP/IP looks pretty solid to me. NFT is basically TCP/IP with memory, why shouldn't that be useful for all sorts of things?
Bitcoin is more like gold, NFTs are more like network based consensus validation of ownership.
All the most interesting developments in computing start like this. This is good. The future is being born now and not without the required creative destruction.
Lots of hype, most of which never pans out, with a core of projects that change the world.
I think that’s the whole point. An enduring aspect of human culture is that we praise and confer social status on owners or stewards of rare curiosities. You aren’t buying NFTs for tangible value, you’re buying a speculative investment in social status. And people feel very confident that the market cap and liquidity for buying and trading this type of social status will go way up, and that unique, verifiable digital ownership allows the pay-for-status desires to take place untethered to physical goods.
With something like CryptoKitties, you can do something with the tokens (play a virtual pet game). But with something like CryptoPunks you're essentially paying for digital beanie babies, which are worse than real ones since anyone can display and enjoy the image you paid for.
You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set. When a set's popularity wanes, so does your token's value, and your ability to show it off.
I'm always happy to see artists being paid for their work, and if they can make some money during this craze - more power to them. Beyond a few creators being rewarded, it seems like this is going to be 90% bubble (with plenty of hucksters), and 10% real use cases that stand the test of time.