The artist could refuse to transfer this if they don't like you, or they don't like who you are selling it to. Or the artist could create a "copy", and sell the exact same thing to two different people and both tell them they own print 03/10. An NFT addresses both of these concerns, and if you are buying these solely for speculation these are both real concerns.

Heck, then print out a certificate on some nice paper, state that the holder of this paper is the owner of the work, sign it, and stamp into some wax on it that has radioactive isotopes mixed in that can be used to date it.

You’ve got your NFT which the holder can then resell as you will. If the artist then sells another certificate claiming it is unique, sue them.

An NFT does not solve or prevent the artist from selling additional editions of their work. They can always create more tokens.

Yes the original artist, or anyone else could create NFTs of the same image. And in the same way the artist could come out with a limited series of 10 prints, then make more of the same prints later.

But there is no way to create a forgery and duplicate your NFT. The digital provenance is all there on the blockchain. With a physical object anyone could create it later and claim it was an original.

The NFT is just a receipt, currently without any legal standing.

The digital asset itself is not protected and infinitely copied. Everyone who views the asset has made a copy. There is no original.

Physical items cannot be copied perfectly. There is always an original unit that can only be in one location. This fact alone creates intrinsic value that digital items lack.

There is a real cost to creating an NFT(on the ethereum blockchain, by people who have valuable ideas/art), it cannot be copied, and it can be sold. That is all you need to have digital scarcity, to have value for speculation. It doesn't need legal standing or any physical attachment to the real world to be valuable.

It's not like people are spending hundreds of thousands of dollars on artwork or signed sports memorabilia because of the utlity. You can get a comparable print or a brand new piece of sports gear for far less. There is some grey area on the lower end though, and an NFT has zero utility here.

There's no such thing as digital scarcity. It's only artificial scarcity, and for that you need something to control the supply.

Anyone can copy the asset. Anyone can also create another NFT to the same asset. So which token is the "real" one? That's the centralized scarcity that's required, which really just added a layer of indirection without solving for anything.

> "spending hundreds of thousands of dollars on artwork or signed sports memorabilia because of the utlity"

Again, this isn't about utility. It's about intrinsic value. Physical goods have a single original object which gives them value that digital items don't.

Scarcity of precisely what is the question. In this case, a small amount of metadata. That metadata is inherently worthless, because the metadata is just information that can be copied, and a new supposedly "scarce" token can be created with the same metadata.

I'd argue that this limitation is artificial as well. With some painting forgeries, you're getting down to the molecular or brushstroke level of differentiation. It's all about the value that we humans assign to what's considered "an original", and I think that's what's happening with NFTs today. Unlike tangible art, however, I think NFT art is much more volatile and prone to the Beanie Babies effect if its popularity wanes.

> what's considered "an original", and I think that's what's happening with NFTs today

An original what? Remove everything off-chain from the conversation. All you have left is a small amount text (which itself is *information* !!) in a distributed database. Thats no more original than the particular instance of bootloader code in my desktop computer.

I agree with you. Removing anything off-chain from the conversation, we're left with the equivalent of selling a million pixels on a web page (but at least there was some utility to that, in the form of advertising).

This is true in most current examples of NFT protocols, but we are working on this at pruf.io

Right, but those would be different editions, and would be separate from the original edition.

Even if the artist creates millions of tokens, there's probably prestige from having the first to be issued.

I realize now that calling it an edition was an error on my part, because in irl an edition is a physical copy of the work itself which can be made scarce, whereas a token is just a pointer with a url to some infinitely-duplicable bits, so the edition metaphor does not hold.

> The artist could refuse to transfer this if they don't like you

Really? What if I, the person who bought an NFT, just gave my private key it's tied to, to someone else? What recourse does the artist have then?

I think the argument is that the buyer wouldn't know whether you still have a copy of the key or not. The idea is that the blockchain is used to ensure you cannot backdate a transaction.

Mind you, I'm not a blockchain fan, and I believe that blockchains and cryptocurrencies are the absolute worst way to solve the problem.

I mean for non NFT art, at a certain point the legal system can prevent you from selling it. Like if you had a piano made of ivory, or if there were international sanctions on the buyer.

> The artist, or a company, could easily just maintain a database showing who 'owns' which artwork NFT

What if hackers hack into it and scramble all the data. What if the artist happens to alter the data him/herself?

I think a decentralized database is a small benefit (when we're not discussing the environmental externalities).

> What if hackers hack into it and scramble all the data. What if the artist happens to alter the data him/herself?

The same questions also apply to blockchains. But if a blockchain is compromised, then who will I sue?

Not a question unique to NFTs

https://en.wikipedia.org/wiki/The_Physical_Impossibility_of_...

But with blockchain-based NFTs the artist much maintain such a database themselves anyway. Someone must maintain some kind of off-blockchain store showing which NFTs are "official".

What if hackers hack into the artist's computer and steal their key and create new NFTs?

It won't affect the original NFT or the ledger w.r.t. who owns it.

Obviously. That's not what I'm saying. What I'm saying is that someone can just as easily hack in and steal the key and forge new NFTs as if they were the artist.

Which now, as someone else mentioned, you need a database of invalid NFTs. But if the artist's key is stolen, how does one create a database of "bad" NFTs? Now you have a bigger problem. Either you create a mechanism where a 3rd party can revoke an NFT or you create a separate ledger of "bad" NFTs. But how do you verify that new Beeble is Beeble and old Beeble is not Beeble. And now what if their key for signing the "bad ledger" is stolen?

Do you see how recursive this whole tower of trust is? At least with a central database the maintainer could restore a backup and notify all parties that they were hacked. With a blockchain, you're fucked. There is no "undo".

Great, so why don't you go create your central repository of art ownership, launch it to the world, and let me know how many people use it over NFTs.

You don't get to decide what the best/worst solution is. We already have a mechanism for that called the free market, and the free market is disagreeing with you. Seems like your take on the world isn't as accurate as you believe it to be.

And if it's reported as stolen all NFTs crafted after that date will be known to be invalid.

Won't there need to be centralized authorities to check if something has been stolen?

This is the same problem with pub/priv keys for email. How do I prove I am who I say I am?

The best defense is just to use a hardware wallet to not get in the situation in the first place. After that all you can do is post to your various social media accounts that you've been hacked and here's your new wallet.

Assuming NFTs become more mainstream and integrated with banks for land deeds and the BMV for car titles, something more official would likely be put in place (this is the best case long term scenario for NFTs).

> Assuming NFTs become more mainstream and integrated with banks for land deeds and the BMV for car titles, something more official would likely be put in place

Ummmm.... elephant in the room! NFT is the trust mechanism

You're saying: "NFTs will be good once we do all this other stuff in the real world that we are already doing". Thus negating the entire reason for NFT to exist.

You are correct that the NFT is valuable because the artist says it is (though ideally, artists should be digitally signing their works with their private key, which is a whole other thing).

What the blockchain provides, however, which is incredibly valuable in the art world (not saying this isn't vapid, btw) is provenance in a secure verifiable way that would likely extend past the lifespan of any centralized company.

Showing provenance is basically a requirement for any high value work of art, which gets more and more difficult as time goes on and the work changes hands. We're talking timespans of hundreds and thousands of years.

Highly recommend watching the fascinating show "Fake or Fortune" -- on Amazon Prime (at least in the US) -- to really appreciate how much people care about provenance.

How does blockchain provide provenance? Anyone can make an NFT for anything.

Surely only the artist can actually do that and that requires the statement saying which NFT is the real one to be stored somewhere for it to work.

It shows how the art has changed hands and been transacted over time. That is an incredibly difficult thing to do in the physical world over hundreds or thousands of years.

You are correct that at the very initial point of minting there still needs to be some proof (i.e. artist cryptographically signing the data of their work with their private key), which as I understand, is not something that's really done currently (and should be).

Right but an NFT is just a link to a URL so there is no guarantee that it points to what it did originally or points to anything at all. All it guarantees is the provenance of the token, not the art itself.

Yikes. OK that seems like not a proper use of all this, then!! Seems like it would be more valuable to transact with just the artwork data signed by the artist's private key maybe with a bit of other metadata. But a URL??? Sounds like a lot can go wrong with that.

Hey ya, OP here.

> It's been pointed out many times that anyone can create an NFT on a blockchain, and just because you own an NFT with a URL of http://example.com/example.jpg doesn't stop anyone else from creating another NFT with the same URL.

I addressed this under the section called "Common Objections". To sum up, even if someone else created an NFT contract with an entry pointing to the same URL, it likely wouldn't be viewed as legitimate.

I'm borrowing the term legitimate from Vitalik, which showed up on HN the other day. https://vitalik.ca/general/2021/03/23/legitimacy.html

Legitimate is whatever most people accept to the be case, in that social context. It doesn't matter if you don't view either contract as legitimate, because you're not a party to the social context where different parties are transacting. It only matters to those transacting in that social context. As long as the two parties can agree what is legitimate in a social context, then that's what works for them--kinda like how people agree on a price on an exchange. As long as a buyer and seller agree on a price, it doesn't matter if anyone else on the exchange thinks it's overvalued or undervalued. The aggregated agreement on which contract is legitimate over all transactions is what we collectively agree is legit.

> An NFT is 'genuine' solely because the artist says it is.

Sort of. It's more like a benevolent dictator position. A creator has the power to dictate which NFT is genuine because that power is conferred by the fans. There is no leader without followers.

But this power can be taken away. I'll refer to Vitalik's "Legitimate" post again.

"To better understand the force that we are getting at, another important example is the epic saga of Steem and Hive. In early 2020, Justin Sun bought Steem-the-company, which is not the same thing as Steem-the-blockchain but did hold about 20% of the STEEM token supply. The community, naturally, did not trust Justin Sun. So they made an on-chain vote to formalize what they considered to be a longstanding "gentleman's agreement" that Steem-the-company's coins were held in trust for the common good of Steem-the-blockchain and should not be used to vote. With the help of coins held by exchanges, Justin Sun made a counterattack, and won control of enough delegates to unilaterally control the chain. The community saw no further in-protocol options. So instead they made a fork of Steem-the-blockchain, called Hive, and copied over all of the STEEM token balances - except those, including Justin Sun's, which participated in the attack.

The lesson that we can learn from this situation is this: Steem-the-company never actually "owned" the coins. If they did, they would have had the practical ability to use, enjoy and abuse the coins in whatever way they wanted. But in reality, when the company tried to enjoy and abuse the coins in a way that the community did not like, they were successfully stopped. What's going on here is a pattern of a similar type to what we saw with the not-yet-issued Bitcoin and Ethereum coin rewards: the coins were ultimately owned not by a cryptographic key, but by some kind of social contract."

This is possible because the NFT is on-chain. It'd be much harder to do if Justin also controlled the centralized database with the NFT records.

Also, blockchains do add and enable things with NFTs. See the sections under interoperability in the post.

Thanks for pointing this out, I'll update the post later to be more clear.

This is similar in the way that you can own a currency note, but denied it's value. Notes in a certain serial number range can be declared to be invalid, even with criminal penalties for dealing in them.

Beeple said which one was valid originally, which is how we know which smart contract and which token ID is valid.

But after Beeple dies, we will still know the correct one. The authority happened at minting, but from now on is programmed into the ledger.

> Despite all the crypto verbiage, blockchains don't add or enable anything with NFTs.

Wrong - blockchains add the digital scarcity component that you don't get with a centralized company running a relational database.

Where do we go to find out which NFT is valid according to Beeple? How is this information stored, authenticated, distributed?

A centralized company running a database absolutely can provide digital scarcity. If they could not, then why would there be a real money market around in-game items for many games (which may include some limited run or even one-of-a-kind items).

Sure one can say that NFTs are uniquly identifyable. But that does not mean very much. People might claim it means the owner of the database cannot just make your unique item into something super common by creating many copies.

But they still can create many nearly identical copies differing basically only the NFT token's id, which in effect would act like a serial number.

I don't see this providing any scarcity that a centralized list of "offical" owners does not provide.

The 'NFT company' maintaining the database would still show who 'owned' it long after Beeple is gone. Running such a company could be profitable because you could charge a small fee for the admin: right now it costs around $100 in ethereum fees to buy an NFT, so it could even work out cheaper! As a side benefit, such a company could also host the artwork, ensuring that the inevitable link rot that will otherwise afflict most tokens won't take place. Win win!

How can there be scarcity when anyone can copy the digital files infinitely without permission?

The whole point of artificial scarcity is that something can control and prevent the replication, otherwise it's not scarce.