My point is, that states have monopolized property transfers and there's all sorts of weird and arcane laws and practice around how you transfer property- especially real estate- and convincing the state to recognize an NFT as evidence of anything is going to be a real challenge.

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"

Blockchains are a shortcut to social consensus, not the final word. There is substantial value in the state giving credibility to a blockchain, allowing an NFT title for a house to be transferred digitally.

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.

So now you have two ledgers: one on a blockchain and another one that's just "the court said X". They will diverge over time, and eventually everyone will just use the latter one, because that's the one that counts.

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?

The court, in making their ruling, could forcibly transfer the NFT, as it would make sense that they would give themselves admin status in the smart contract. So there's no reason the blockchain would need to diverge.

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.

I’d add on the “why not use a database” - in general you should always prefer a database to a blockchain/DLT, all else being equal.

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.

Are you insane, what happens when my grandma forgets her password?

there is work being done on bridging smart contracts with contract law and it may be further along than you think. https://www.lawsociety.org.uk/topics/research/blockchain-leg... https://www.lawtechnologytoday.org/2020/12/how-smart-contrac... https://www.ikigailaw.com/how-have-different-states-in-the-u...

It seems to me that there's going to be an unbridgeable gap when it comes to physical property. If someone hacks my wallet containing my "house NFT" and transfers it to themselves and I can't hunt them down and force them to return it, who owns the house? How do I sell it, if I don't have the NFT? Can I go get another NFT minted, and who from? How does the buyer know that this newly minted NFT represents the true ownership and the old one doesn't?

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.

One easy way to resolve all of these problems is to build an escape hatch in the contract so that in the case of theft, loss, or other special circumstance you can invoke arbitration and mint a new token if needed.

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.

When I read about smart legal contracts, all I can imagine is Google's live-staff customer support combined with government flexibility. Is this the future we want?

> NFTs are the digital equivalent of a vehicle title, that's the strongest usecase (proof of ownership)

No they aren't, and least not until they're recognized by law as such.

It is already possible to write legal contracts which say “whoever controls token with public key X, hereforth ‘Owner’” for many asset classes.

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.

Right, analog of a purchase receipt is maybe a better way to put it.

I'm not sure what a "usecase" has to do with laws, a usecase can exist outside of the law.

Are you implying that laws should come before inventions/ideas?

> a usecase can exist outside of the law

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.

Let me reprharse this.

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?

You're missing the point. A deed is only as good as the legal framework that enforces it as a representation of ownership rights. The thing that matters is that framework, not the technology use to implement it.

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.

Oh god, why??

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?

I don't get it. If the law doesn't recognize the paper as the deed for the vehicle, then that piece of paper is worthless.