In a sense, NFTs are a lot like those schemes we used to see where some company will promise to name a star after you, even though no one recognizes their authority to do this. Fine, that URL is "yours". You just own a sequence of bytes, the ones in the URL, not the ones that the URL (temporarily) points to.

Your ownership is now on a distributed ledger, with a cryptographic hash of the content, paired with long term storage of said digital artwork. The Internet Archive's costs are ~$2/GB to store content in perpetuity, which seems insanely cheap to carve off as part of a transaction (Eth gas fees aside).

Nope, you're not missing anything. NFTs are the world's most convoluted and expensive way to store a bookmark.

You are missing something - a huge position in crypto. Like the article points out, your existing investment would benefit from all the hype that a slew of crypto-oriented services and products could give. Irrespective of whether those same services could be implemented "better" using standard centralized tech. And - amusingly - irrespective of whether those services offer products that you would ever in a million years have paid for without the novelty of crypto sprinkled on top - e.g. paying big bucks for receipts for jpgs.

(There's all kinds of problems with it, sure, but they aren't paying for the link.)

With an NFT, you don't get that. It's equivalent to your county clerk's deed registry, including the $100 filing fee, and excluding the legal machinery which gives the deed registry its value.

Sure, I’m not saying an NFT is substantively like a deed, I’m saying the link in an NFT serves a broadly similar purpose to the address in a deed.

An NFT is perhaps more akin to a certificate from one of those star name registry outfits that were popular for a while, but with less specificity as to what you supposedly bought with respect to thing it describes.

https://blockzeit.com/opensea-nft-marketplace-stops-hacker-f...

There is another example in the article - his nft was deleted from the marketplace, and nobody buying monkeys cares what is on the blockchain.

If you’re worried about the government forcing you out of your home at gunpoint, what makes you think they can’t seize a private key or force a few keystrokes?

Again, you’re seriously arguing that it’s harder for the government to take your house rather than give up your password?

Then the people with guns now have to expend resources to maintain and enforce those amendments. If they are not somehow just discarding the entire blockchain subsequent to their amendment, they're maintaining an every increasingly complex set of merges. Furthermore their amendment (very probably) isn't a cryptographic blockchain, so it's subject to all the problems that the actual blockchain list are not (forgery for example).

What makes blockchains unique is that they are the first example of these various records (ledgers, titles, etc) that physically cannot be manipulated in certain ways.

Their amendments are theirs. This is like saying that keeping your own accounting is worse for you than putting it on a blockchain, since someone might forge your own accounting books - it just makes no sense.

"They" can do just about anything they want. They can make their amendment. They can declare the blockchain null and void. They can hold a gun to your head and tell you to sell your NFT. They can even pull the trigger, in an attempt to make an example out of you for the next fool that tries to defy their authority. But the one thing they cannot do is seize your NFT without your volition. Not without breaking some of the fundamental mathematical ideas behind encryption.

Is there value in that in present day society? Maybe not. But there is undeniably something special about it.

That’s not true.

I mean, even if the access to the NFT relies solely on material in your head, there are pharmacological approaches, among others, that while not necessary reliable, can cause you to give up information without meaningfully willing it.

Even a pharmacological approach is a side channel attack which no one seems to care to distinguish between attacks on or flaws with the underlying idea. When discussing the merits of blockchain technology we are allowed to take for granted its very obvious underlying assumptions. Namely that there exists private information held by a user of the system.

No a link isn't a description of its content, just like the article demonstrated the content can change to anything, anytime, in many ways. Even if the URL contains the hash of the content like with IPFS URLs it's not a description of the content but one step better because you can check if it's pointing to the content it supposed to be.

Yes, one of the “all kinds of problems” I mentioned upthread (this one isn't an inherent problem with NFTs, but seems to be a practical one with many current NFTs) is that while NFTs certify ownership of something with regard to the linked content, exactly what that is (beyond the certificate that is the NFT itself) is often not clear, even, AFAICT, to the purchasers.

More precisely you have a certificate that says you own something (often ambiguous, though this could be precise; ambiguity is a choice in the minting of an NFT rather than a fundamental issue with the technology) relating to the content described by means of a link (the NFT may or may not include additional description of the content via metadata.)

So I suppose it is more accurate to say they own that particular citation of the url embedded in the blockchain, for certain values of own.

People that earn money on NFT don't have feeling that they miss something.

Correct, because it's clear storing the content in web2 Internet Archive is superior ("you’d have to store the NFT data on chain, which is prohibitively expensive"). They will persist regardless of web3 shenanigans, and hash addressing ensures content integrity. You could even use a torrent to store and serve the content (again, which uses hashes to identify and preserve integrity of content).

Why would one trust a distributed ledger over a centralized archive run by folks whose primary focus is on preservation of the bits they're storing? The economic benefit of running storage nodes of encrypted content is unlikely to ever be sufficient to provide the same economic incentives a corporation or non profit realizes by offering the durability a centralized service provides (due to scale).

EDIT: @Ragnarork It seems like web3 is making some promises it can't keep?

Isn't that the polar opposite of the promise of web3...?

Then when I want to interact with a centralized NFT marketplace, I can upload the preimage to their server. They'd verify the hash and store the image. I'd continue storing it myself though, so if that marketplace goes away, I can follow the same process with another one.

Obviously you'd want to keep a copy yourself, but at least you could then prove to others the file you have really is the one the creator sold, no?

No expert at these crypto things, in either sense, am I missing something?

Its common for image files to be modified, many times even automatically by the hosting service. They might compress it, remove unnecessary metadata, or add metadata for themselves. Any of that would break the hash, so you'd need to make sure any host you use to store the original absolutely never changes the file.

Then what? Well the image exists and you can verify it wasn't changed off-chain since the transaction finalized, so that's good. There's now an image publicly available online BUT a specific block chain says you own it, so that's also cool.

But wait, that hash isn't guaranteed to be unique so really anyone could make another NFT pointing to the same URL and file hash, now they also own it? And anyone could just download the file, so they own it to? And there are no legal protections for NFTs, so what was the benefit of paying to have one block chain transaction say you own it in the first place?

Which is trivial, just download the file. The place where you bought the NFT would ideally have some facility where they guarantee you can download the correct file, otherwise why buy from them?

> But wait, that hash isn't guaranteed to be unique so really anyone could make another NFT pointing to the same URL and file hash, now they also own it? And anyone could just download the file, so they own it to?

Preimage attacks are quite hard to accomplish from what I understand against modern, secure hashes. If the hash used is later broken and a preimage attack is possible then yeah you're screwed. That's a risk you take.

As for exclusive ownership, I forgot in my initial reply to add another aspect I thought about which was the license. That is, some well-defined licenses should be specified, similar to the Creative Commons stuff, and the NFS should specify one of them. Then you know if you get copyright or not etc.

Enforcement of the license would of course be similar to other digital assets, ie hard to do unless you're big, that's just the nature of digital things.

Now, just to be clear, please don't take this to mean I'm advocating NFTs. I just think the way they're currently used seems to make them completely worthless, while in theory it might be possible to make them not quite worthless.

And then what am I spelling later? A transaction immortalized in a block chain with nothing more than a broken URL and, at best, a hash of the original file?

Edit: I realize I sound a bit dickish in how I'm replying. Don't take it that way, I'm really confused at how NFTs solve anything but really appreciate the conversations here and am glad to hear differing opinions!

Not much as far as I can tell. I mean it would kinda be like a signature on a painting, in that it's a visual indication of who made it. But the proof would be in the digital, cryptographic signature.

> I'm really confused at how NFTs solve anything

I'm in the same boat. I'm just trying to figure out how they might be useful if they implemented them differently.

Anything in them can be copied trivially, so on their own they are per definition not unique hence fairly worthless.

If they're only useful when two parties agree they are worth something during an exchange, how are they different from plain cryptocoins?

I mean this is a bit similar to the GPL, it would be useless if courts declared it can't be enforced.

And what does it mean for the transaction on the block chain if both the URL and the hash no longer match? Is it worthless now and unsellable? Or do you sell it with a note that says ignore the URL, ignore the hash, or both?

I did point out other issues and that may have been unnecessary, but a hash doesn't solve the rug pull problem if the art isn't part of the encrypted and (mostly) immutable transaction block.

Not really. The hash would prevent someone to pull the rug unnoticed, but it wouldn't prevent rug pulling in the first place.

With a hash, you would be able to prove that what's currently at that url isn't what you bought, but (since hashes are by definition non-reversible) you wouldn't be able to show or see what it was you bought (unless you stored it somewhere else yourself).

Which is usually trivial.

https://www.arweave.org/

Though, I'm not sure how this will "scale".

It could be cheaper if someone can finally make a P2P network which becomes and stays popular[1] but it’ll always require more than a one-time payment. That could be donor funded (Internet Archive) but I’d be leery of assuming anything long-term unless you’re paying for it.

1. Abuse is the hard problem here: if I host a node, when the police download something illicit my IP is the one they see and I have to prove that it was done without my knowledge. This is why nobody does this except for known sources.

That's what they are trying to solve with their tokenomics model.

The value of token will appreciate over time whereas the price of storage will keep getting cheaper.

It's simpler than s3 in many aspects so I'm not sure you would need a system administrator. Everyone can run a node and things are replicated many times over. The failover model is to look for the next node. There are no API, security, access, etc consideration to be maintained at the node level.

Data itself is public by default.

> Abuse is the hard problem here: if I host a node, when the police download something illicit my IP is the one they see and I have to prove that it was done without my knowledge. This is why nobody does this except for known sources

Yeah, that's important.

That's not a given, however, and it's not just raw storage but also network bandwidth and operator time which all require regular ongoing payments. Expecting newcomers to pay for the early adopters' storage in perpetuity is tricky because you need high demand for an otherwise useless token but there's a limit on the price for most users in the form of all of the competing options, which are currently faster and more reliable.

> It's simpler than s3 in many aspects so I'm not sure you would need a system administrator. Everyone can run a node and things are replicated many times over. The failover model is to look for the next node. There are no API, security, access, etc consideration to be maintained at the node level.

It's not that simple: anyone running much storage will need to spend time replacing failed drives, managing their bandwidth relative to demand, etc. That time needs to be paid for. Massive replication is necessary to deal with the reduced node reliability but that means the network needs to pay for considerably more storage in total than, say, Amazon does and adds significant scaling issues managing all of those extra nodes with more frequent status changes.

This has been tried a number of times before and it always founders due to being slower and less reliable, with considerably more complicated software required to deal with all of those issues which the competitors don't have. It's possible that this will be more successful but I think it's really important to look at how the market pressures have consistently gone in the other direction. Amazon didn't end up with exabytes of storage in S3 because it started there — people migrated their data there because it was faster, cheaper, and easier to have it there — and that is a competitive challenge for a replacement trying to build on nodes which aren't maintained with comparable levels of service.

It fundamentally can't - you need X amounts of storage * replication factor to store X amounts of data * replication factor.

Sure you can back up an image, but the backup is worth the same as a copy of the NFT: zip. You now own a pointer on the blockchain to nothing and a jpeg on your disk. I’ve got a lot of that going on already with zero expenditure.

Similarly, you can prove to others that the version on your disk the version pointed to by the blockchain by having people check the hash.

It seems like this would be absolutely trivial to implement, right? Just... add a separator token (say `#`) and a content hash (say with `sha1:` prefix, urn-style) to the end of the URL that's already in NFTs.

I don't really understand why NFT's don't already do this. I don't understand why they didn't do it from the start. It seems an obvious choice to me in designing such a thing. Like, it's so easy, and such a step up in making NFT's do something closer to what people think they do... it leaves me thinking that the design of NFT's just wasn't done seriously, and nobody using it really cares.

What am I missing?

It’s like that crypto thought-leader on Twitter who didn’t know his NFT’d pfp was being served to various web clients over http.

It’s also why web3 startups are throwing huge cash at engineers from “web2” companies because, while they may not be crypto experts, they know how to build scalable systems, how web tech works etc. That knowledge is sorely lacking in the crypto space.

https://twitter.com/cat5749/status/1476813266462539779

A permenantly verifiable has still doesn't really solve it though. Someone can still change or remove the file later, even if you downloaded the original before you now have a transaction with a bad URL but a good hash. You can't update the transaction to change the URL, so what would that mean for anyone wanting to buy the NFT from you?

There's also the much bigger issue - say we solve the above problem as well. There are no legal protections for NFT ownership and there is nothing stopping people from just copying the artwork you own. What's the point of paying so much money for the right to kind of own a piece of art that anyone can legally copy and use?

I don't fully understand the "collector" mindset. But let's assume there are people, similar to whales in free-to-play games, that are willing to pay ridiculous large sums for what the majority would not be willing to pay anything for.

Now, think of those collectors as being willing to pay for ownership over original artwork.

The Mona Lisa itself has many replicas, you can buy prints of it, and you could probably easily find paintings of it for much cheaper. Those are all copies as well, but their monetary value is much lower, because people know they are not the original.

Now, think of photography, there are people collecting prints, sometimes of digital photography. Similarly, the 1st print is worth a lot more. Think of Vinyl records, or CD/cassette tapes for music, the worth of the 1st pressed record is a lot more, and collectors are willing to pay a lot for them.

Now think of complete digital art, that which is not even printed. Which is the "original"? Unless you were to own the HDD or the RAM stick where it was first recorded, all instances are perfect copies of the same bits. So instead, the "original" is the first person the artist publicly acknowledged as the owner of the "original". It is like the artist signing the print. This is recorded in a public ledger, that people trust and believe to be very hard to manipulate or fake. That is what an NFT is.

You might find it absurd, but is it anymore absurd than paying lots of money for the 1st print of a photo? Or the first pressed vinyl? Or the first book as signed by the artist?

The value is in people's head and emotional attachment. Someone was given by the artist themselves recognition of the piece signed in a public ledger. That's now the "original" and people assign it value.

You can think of it a bit how a lot of collectors offer public showing of their collection, the fact others can "see" the artwork for themselves isn't what make it valuable, it's the emotional knowledge around it, that of having it handed directly by the artist itself.

This is what I've understood of it at least.

Edit: Now the article still makes good point, that as it stands, some NFTs are ambiguous as to what artwork they even relate too or if they were truly created by the "artist".

I think the idea of NFTs is that you know that the original artist (Beeple or whoever) issued the NFT, they clicked the buttons and saw the same hash you see on your screen.

Like if Leonardo da Vinci sent you a cryptographically signed email with something in it indicating that you specifically owned it, you'd probably find that valuable even though it's "just pixels" and the email can be copied - the ownership is embedded in the signed email (your name or public key, let's say) and can't be copied.

I think that's the point, anyway, I still don't think I really get it...

There's probably a whole industry around recognizing a true or a fake painting. I'd say if you possessed the Mona Lisa, you might still doubt its authenticity, or find yourself in a big debate with others who claim to also possess the "true" Mona Lisa. In a way, NFTs don't (or could be made not to) have this problem. I think this is actually something that people in the market of art collecting and trading actually value. I think especially in private collections, you can claim to have sold me the original bible of Pope Pius XII for 10 million and hand me a bible that is a fake, I believe to now have the real one. And then I can go and resell it to someone else for 11 million, while you also go and sell the real one you still have for 20 million to another person, and now three people believe to all have the real one. The NFTs being in a global ledger, it would be clear who owns it truly, even if three people have a copy of the same PDF.

> But even then the vinyl is physically old and unique. I can take it out and know that it was pressed in 1972.

That's because you value the artifact. But I'd say in this case the NFT IS the artifact. The NFT is what will live on, because in 2125 (assuming the chain still exists), someone will have this token tied to their own wallet. They can know that it was minted in 2021 with the same certainty (and possibly even more certain) that it was truly minted in 2021 by the artist himself (or at least the person whose key society believes was the true artist).

Finally, if the NFT contains say an IPFS URL, or some other content describing attribute, its even more clear. You know you own the first "copy" if you want.

Let me put it some other way. I create some JPEG drawing. I then hash it and have a hash of its content. I then register my art (the JPEG) on some chain by creating an NFT for it which contains said hash (maybe in the form of an IPFS URL). At this point, the world through the public blockchain ledger knows about my JPEG art, and as the first in the chain, I prove to be the creator, or it is known that I am the creator through some other means, like posting it to my blog.

I own the NFT for my own JPEG art at this point. I can host it myself on IPFS, or maybe I just post it on my blog, or even keep it secret on my computer. Now you want to buy it from me. At that point you pay me money and I transfer the NFT to you, the ledger now says that the token started from me and was transferred to you. You now own the token that says that the IPFS hash URL or the hash of my JPEG art belongs to you and was given to you by me, the artist. I also give you a copy of the JPEG itself through whatever means, maybe you download it from my IPFS hosting, or I send it to you by email, or you download it from my blog, etc.

In the digital world, it is all copies, but only you have the token.

Ya, if the token doesn't include the content description like a hash, it's a bit fuzzy and a lot crappier, because while it would show you got some token from me the artist, its not clear which of my artwork would be the one you have, assuming in 100 years the URLs were to no longer exist for example, or to point to something else. But I think this will become the norm eventually to have the hash or use IPFS.

I agree with you, I still would prefer a physical artifact, something that you can see the wear and tear, something from an old era, maybe it doesn't even look the same, maybe bits of it are gone and forgotten. But that's just me and what I'm willing to value. If people are willing to value a digital good the same, knowing the token traces back to the original artist, and they see the value in that, then it can be worth just as much.

Any hash can match virtually unlimited number of different turd images.

And even if you trust the hash function to never be broken or brute forced with future technology, it can only verify the image, not prevent it from being deleted or altered, rendering the NFT broken and useless. Verifiably broken and useless, but still...

And why are NFT links so common, because they just seem short sighted to me and borderline dumb considering how volatile everything in the crypto space is?

Nothing about NFT's seems long term viable as they are now.

Within the smart contracts themselves is a read function for that content uri that provides all the data needed (from what I've seen, a hashed string) to generate an .svg file. But it obviously taxes the system and costs a lot more in gas fees (not to read it, that doesn't cost gas fees, but to deploy the contracts and mint), especially the more complex those are, which is why you mostly see it with 8-bit or very low-res artwork.

Cryptopunks being the most well-known (and also the most valuable) NFT project is all on-chain, and Anonymice being the most open and forked project that does this. EtherOrcs does it a little differently but is also on-chain and has completely open contracts you can refer to as well.

There's quite a few more besides this, but I don't know what percent it is, probably pretty small. Some people won't buy anything that's not entirely on-chain. But you're right that most people don't really care, they just care about the price or the image.

I've been digging through the Anonymice and EtherOrcs contracts to get a better understanding of the different approaches they took (and I still wouldn't say I completely understand it yet). It's pretty interesting, though.

[1]: https://www.larvalabs.com/blog/2021-8-18-18-0/on-chain-crypt...

[2]: https://anonymice.org/

[3]: https://etherorcs.com/

EDIT: Sorry, you only said cryptographic hash. Cryptopunks started by providing that, but then moved to entirely on-chain (so above and beyond that), where you could query and get a full SVG file or stream of pixels for any given image directly from the contract.

But it could also mean that the Internet Archive creates a special page, say, "Owned URLs", where they list a username owner for each URL that someone has payed for. If you wanted to trade your URL, the IA would get a small cut to modify the contents of that page with the new owner.

This is 1:1 equivalent to the proposed scheme, but cuts out the inefficient "mint NFT on Ethereum blockchain" step, replacing it with a simple database on the IA side.

Or those NFT contents (and the URL domain!) are guaranteed not to disappear unless many web 1.0 and 2.0 services people was paying for and went out of business?

An article about this: https://www.theverge.com/2021/3/25/22349242/nft-metadata-exp...

In fact decentralized storage being integrated into web3 is I think an element that the OP missed in his analysis.

You can attach a IPFS hash to your NFT (or w/e) while still using clients that use a more reliable gateway.

It’s almost like you want some centralised entity to preserve copies of the images these NFTs link to.

I wonder how many IPFS-backed NFTs are only being seeded on nodes run by the big players like OpenSea?

It seems a substantially less silly idea than pointing a token at a url that you don't control. I guess I'm surprised that NFTs aren't all hosted on IPFS or something like it, if only as a backup. Like, have these people not heard of linkrot?

But I guess as long as the buyers don't realize yet that their immutable ledger entry can become a dangling pointer in a puff of smoke, it doesn't matter.

I was surprised too, but only for a moment. In the end it's basically just a record that you "own" a small amount of data (url, ipfs hash, 'coin'). Unless my ownership gets me some utility (like exclusive access to the jpeg, maybe? Ability to transfer the ownership to El Salvadorian govt to pay my taxes?), I don't see how it has value

Many NFTs are hosted by NFT platforms, and also by services such as https://nft.storage/ (backed by IPFS & Filecoin). It's quite trivial though to take the IPFS CID and pin it somewhere else (local computer, a pinning service like Pinata, etc.), and anyone can do it at any time. If all you want to do is be able to prove ownership at some point in the future, you don't really need to host the content indefinitely on IPFS...just host it when you need to.

Arweave is also a one off fee to have the file mirrored forever, the hosters are paid from the yield earned on that fee.

You are correct about IPFS, it's just like torrents. There are services like Arweave, Sia and Filecoin where you can pay...

Every user of the network has to provide some storage for the network itself. If there's not enough storage to safely store your new content on the network as highly available, the network would just say sorry, can't do right now, please wait on the line while we get new storage (users).

Sure, it would need some massive network effect to work at scale, but we have now, what, billions of devices connected to Internet? That ought to be enough.

I never really understood this current "decentralized" tech. Decentralized hashes with centralized gate keepers, and mixed with "old school SPOF tech", e.x. the VPS's that store the actual content. wat.

edit: 10GB per device/user and 1 billion devices. That's 10 exabytes. https://www.wolframalpha.com/input/?i=10GB+*+1+billion

And nobody wants to participate. These projects are doomed to be extremely niche. As TFA points out, even nerds do not want to run their own servers at this point.

It could have worked in the days of casual piracy (kazaa, napster, certain private torrent sites etc had a shitton of users) if you managed to sell it as a way to do exactly that..

But getting people to install apps today to donate their bandwidth and disk space for.. what cause? Let alone when they figure out that gasp your storage may then be used for illegal material. Nah, it just doesn't work.

Then forget about the anonymization features of Freenet, and build something that ties to your Google Auth, Facebook ID, Government ID, whatever.

And let LEA access all of the content and seize/prosecute illegal content. Really not that different than storing your content on any of the cloud storage providers. With the exception that your data would be always guaranteed to be highly available, and not on just one or two centralized cloud storages.

>But getting people to install apps today to donate their bandwidth and disk space

That's just a marketing headache. ;)

It’s not that simple: if you host anyone’s content, you’re taking on personal risk (do you want to have to convince law enforcement that the pirated Disney movie or child pornography served from your home IP was served entirely without your knowledge?), giving up your resources (“Netflix is slow, turn off the mirror and see if it gets better!”), and getting slower performance/reliability (e.g. why OpenSea uses GCP instead of IPFS) immediately in the hopes that it will at some point in the future become worthwhile.

Note also that cloud storage is centralized administratively but distributed for reliability. I would give very long odds that you’re more likely to lose data through random IPFS nodes disappearing / dropping your data than on S3, and if you have to run your own geographically replicated nodes it’ll cost more in your time until you have a very large amount of data.

Statistically nobody does that, and because P2P networks need to significantly over-provision to compensate for unreliable nodes it’s hard to get anywhere close to competitive. The Linux world has the freedom ethos, no concerns about copyright/malware/etc., and still few people torrent ISOs because it’s usually slower.

This is why we can't have nice things. :D

It's true that most NFT buyers have zero idea how this works. In 2 years multiple shitty NFTs are going to turn into 404. This is fine - people will learn to only buy images that use ipfs.

I always thought IPFS just as a BitTorrent but with blockchainy tech stack.

But if it can indeed guarantee that my content would always be available, then IPFS is the answer.

Ultimately, the owner has to host it, or pay someone to host it, or hope someone else hosts it. Although nfts are small enough that any semi-popular ones may stay alive potentially forever as long as someone, somewhere, hosts it on an ipfs node. Potentially long forgotten by literally everyone alive.

This doesn’t fix any issue. If the URL changes, your NFT is worth nothing and you have no way to get the object back.

I played a decent amount of Runescape growing up, so when I first heard of NFT's I naturally thought of that game. I would definitely find intrinsic value in truly owning an NFT of some of the rare in game items. And knowing that even if Jagex (parent company) disappears that I still have ownership over the items definitely adds a lot of value.

Should Jagex fold and the game become unplayable, what do you own? An entry in a database that says that you once had this item but you can't do anything with it? Why is that valuable?

I can sort of see the argument if other game developers allow for these items to be reused in other environments, and that's something pushed by NFT enthusiasts, but I don't see how that makes economical sense.

For one thing that puts a lot of work on the table of other game developers. If every NFT of every game needs to be usable in other games, can you imagine the headache? It's a combinatorial nightmare.

Besides devs want to make money selling their own NFTs, not adding items made by others for free, so what incentive is there for adding support for your rare Runescape item in some other game? Seems like devs would rather sell you a special "Runescape retro item set pack, only $9.99!"

And then we haven't even touched on IP issues. If you have an NFT of Lara Croft, can the devs of another game just clone the model in order to let you import her?

I feel like all of these issues by far dwarf whatever convenience NFTs bring to the table. The problems I outline above are the ones that need solving, and if you find a way around those you could very easily achieve what you want without "web3" tech (see Steam trading cards and Nintendo's Amiibos for instance).

Sometimes just ownership of something is valuable in itself. That's the whole idea of collectibles, it's not always tied to its original utility. Think having an original SNES versus an emulator on a computer or an original Picasso vs a digital jpeg copy.

>For one thing that puts a lot of work on the table of other game developers. If every NFT of every game needs to be usable in other games, can you imagine the headache? It's a combinatorial nightmare.

Every NFT of every game doesn't have to be usable in other games, but the option to easily access the in-game ownership records of another game can allow for some asset sharing.

>And then we haven't even touched on IP issues. If you have an NFT of Lara Croft, can the devs of another game just clone the model in order to let you import her?

No but maybe I can give a Croft-esque outfit to an in-game character if the player has the Lara Croft NFT. It could be a selling point to some players to be able to play with assets inspired by another game they love. It could also add some unrelated mechanic to a game in which case the NFT is just used as a marketing ploy to advertise to a certain demographic. Re-using NFTs could also be completely unrelated to 3rd parties and can allow developers to allow easy migration of old assets from old games to new ones without having to maintain teh records themselves.

>I feel like all of these issues by far dwarf whatever convenience NFTs bring to the table. The problems I outline above are the ones that need solving, and if you find a way around those you could very easily achieve what you want without "web3" tech (see Steam trading cards and Nintendo's Amiibos for instance).

Again, the idea is to have a digital asset that can be traded (in terms of ownership) like a physical asset would -- without the need for a centralized mediator. Just because certain applications typically act as centralized gateways doesn't mean the blockchain itself is centralized. The hope is for the blockchain to be used as a reliable source of information for decades to come with the ability for anyone to participate if given the very accessible minimum resource requirements.

But with a Picasso the scarcity is inherent in its physicality: there is only one in existence. With digital data, it is infinitely reproducible and fungible. If I replaced a JPG with a bit-for-bit copy, no one would notice nor care. Not so with a Picasso. So, NFTs are supposed to come in a make a record of your purchase of this JPG, but unlike the Picasso, this JPG does not physically exist. It must be stored somewhere and, unlike the Picasso, this has an ongoing cost. You don’t need to pay to store the Picasso (although most collectors certainly don’t just keep it in their house, they could). But you do need to pay someone - whether a company or a decentralized network - to keep storing your JPG and once you stop, it’s gone forever. It seems like it would be more future proof if Jagex just mailed you a physical print of the JPG and a certificate of authenticity.

And yes there may be an ongoing cost associated with storing a digital image, but you could also download it on your computer, print out the image, or try one of the decentralized solutions. Ideally the metadata and image would be stored on something like Arweave (which only requires a one-time payment) since reliability through decentralization is one of the goals of the web3 movement.

>It seems like it would be more future proof if Jagex just mailed you a physical print of the JPG and a certificate of authenticity.

If the hosting of the image goes down then you still have the attestation of owning the asset on the blockchain (signed by a private key that has been associated with Jagex on creation of the NFT). As for the physical print option, I'd say since physical things can be destroyed much easier than digital items, I'd prefer it if the certificate of authenticity was just an NFT (trying to enforce an NFT to belong to the same owner of a physical asset is a losing battle).

All in all I'd say NFTs bring value to asset collection by providing stronger attestations of ownership, public provenance, and resilient record-keeping.

Why would a company do this? They spend a load of dev time to create a valuable in-game asset linked to a non-fungible token created by a third party which only one person can possess at a time and then... hope the NFT owner pays $34.99 for a retail copy of the game, otherwise the asset goes unused?

That doesn't sound like a scalable marketing strategy.

For example, how many of those NFTs would have been lost or stolen — and do you want to tell potential buyers “sorry, nothing we can do about it - blockchains mean no margin for error!”

If a developer wanted to market games by offering inducements to players of other games in the form of unique content it seem like a lot of other solutions would be more attractive than the blockchain. Partnership with other developers or platforms like Steam gives you an actual marketing channel to hype the special add on for Tomb Raider players, and to a lot more than 20k people. The only case where I can see them preferring to attract small numbers of players of a third party game who paid that developer for NFTs rather than every player of that game is if their game is pure pay-to-win bullshit and there's no point in targeting the sort of player who doesn't buy NFTs...

What does "digital rights of the Rolex" mean? Also, why is it harder to notify Rolex of this transaction than it is to notify some blockchain?

A serial number can be copied and engraved onto a forged watch, so not really.

A more analogous scenario would be if Rolex embedded an NFC hardware chip with a private key inside the watch, such that anyone could wave their phone over their watch and verify that the chip’s cert was indeed signed by Rolex.

All I’m saying is that a serial number doesn’t really prove anything because it’s trivial to copy. A private key inextricable from the object would be better, because it could generate timestamped signatures as proof.

This is an excellent idea and I am now wondering why luxury brands haven't started doing this. It would be super hot. One would do it and suddenly they would all be doing it. Watches, handbags, shoes, whatever

And fashion brands iterate quickly on their designs so when you see fake LV bags it already looks dated.

There's more steps involved that I'm not sure could be solved, like, who controls the authenticity Oracle? Is it an API that gets pinged? Do you have to pay a gas or network fee to check authenticity? Could a smart contract be made to automate the work? Maybe it could work like credit card chips, which give out a one-time code to the retailer, who then gets it checked by an online service... except somehow replace the web API with a smart contract.

For larger scale operations, tagging individual items with NFC chips might be cost prohibitive.

Gotta say, it sounds kind of crazy

That's why I mentioned distributing the file over IPFS so that it could be easily backuped by anybody forever. If eventually there's no longer any interest in this database it could be lost to bitrot of course, but this is also true of blockchains.

Well, what if Rolex folds and sells their private keys, and an unscrupulous buyer then starts minting Rolex NFTs for fake watches? What if this happens surreptitiously, and not out in the open?

Further, it's far more likely at the moment that Rolex will exist 50 years from now than that Ethereum or Bitcoin will.

This is why I think the really valuable and underserved use case of the blockchain is decentralized identity. You can prove you are who you say, you’ve studied where you claim, you’ve worked at the places on your resume, and do this in ways that cannot be subverted or lost. This would be invaluable for refugees who often struggle for months or years with proving they are who they are.

For people that live in stable countries with reliable governments and strong enforcement of contracts this does not provide much value however, and I think this is why this subdomain of web3 remains underserved.

That's a very interesting use case, but it's hard for me to see exactly how this can be made to work.

Suppose you study at the National University of Unstabilia, which is located in a disaster-prone and conflict-riven environment. You complete your B.A. there, and you get the NUU to record this fact on a public blockchain.

A few years later, things are really bad in Unstabilia, so you move to Belgium. After you arrive there, you tell someone (maybe a prospective employer?) "hey, I'm Joeri, I'm a refugee from Unstabilia, and I have a B.A. degree!". For some reason this person is skeptical, so you say "it's OK, just look up the blockchain record with the following hash!".

Sure enough, the public blockchain contains an entry reflecting that someone named Joeri did, indeed, earn a B.A. at NUU a few years back. This is great, because maybe

* Unstabilia City was mostly destroyed in an earthquake, making it hard to contact people there, and many of the people who would have known you during your studies have likely died or become refugees themselves; and

* Lately, the new NUU administration really hates your ethnic group, so much so that it prefers to deny that people of your ethnicity were just recently widely represented among its student body; and

* Many of NUU's records were previously lost in a fire; and

* Before that, someone reputedly hacked NUU's computer systems and stole all of their records, and probably all of their cryptographic keys.

But thanks to the blockchain records, your new Belgian friends can still confirm that you actually studied at NUU, right?

But, how do they know that that record is really from NUU? How do they know that NUU really exists? How do they know what its signing keys were, and how long they remained under the university administration's control? How do they know whether it's a legitimate university? And, maybe most significantly, how do they know that you're the same Joeri who earned that degree back in the day, as opposed to some other Joeri? Are these records including some kind of digitally signed biometrics?

Asking blockchain to solve those problems is a bit ridiculous. Those are problems that need to be solved in any system, and are solved enough in many today. For starters, its not hard to archive your signing keys somewhere safe and public, especially on the blockchain - the group of Universities and employers who care about that validity will have some central organization in identifying that archive.

This is what the article demonstrates. All the value is in the trusted authorities issuing things, not the transaction record on a blockchain.

Trust is important and trustless transactions with pseudo anonymous entities are not worth much.

The blockchain solves the last two, but if your conception of them is as a magical technology that can solve every issue by virtue of hosting data then you're going to be a dissapointed simpleton.

Your core issue is that colleges are a centralized institution which decide who gets rewarded - that's what it boils down to when you say "all the value" is in trusted authorities issuing things. For starters that's a ridiculous assumption that trust is still necessary for value, but more importantly stating that blockchains are useless because they cannot replace colleges is disingenuous.

You have not demonstrated any added value, and the straw-man insults sprinkled with spelling mistakes do not help persuade.

It has thus failed at its original goal (a useful currency to rival state backed currencies).

The blockchain gets you exchange, with completely transparent meditation, in the form of the smart contract / script code.

You can say it's your house all you want, but if the new regime sends soldiers to evict you, no amount of evidence that it belongs to you is going to help you.

Do you propose that "all" authorities provide digital certificates, in preparation for the region becoming unstable? If yes, paper certificates already exist, and seem to go missing -- why would it be harder for digital certificates to go missing? Or for the thing that ties one person to their digital certificates?

Or do you propose that authorities in unstable regions provide digital certificates? If yes, how can you trust them, given the unstable nature?

I value thinking about these things, but somehow I still struggle to see where the proposed extra value comes in. Maybe I'm thinking too much in extremes, and the value breaks down in extreme cases.

The main reason would be if they could make more money on their digital goods by floating them in a large, open, heterogeneous market rather than in their smaller walled-garden. That's what traditional capital markets are good for, and the name of the game here is figuring out how to recreate those benefits in decentralized digital markets.

What problems can only be solved by using NFTs?

All those creator economy apps show that there's a need to democratise economy. I am again tempted to quote hustlers here.

Not sure I'm following. How would that work, and how would crypto facilitate this?

This doesn't enable real-time transfers of NFTs.

Ideally, the blockchain allows the NFTs to be traded without Rolex relying on another company acting as a trusted third party platform keeping track of ownership, or Rolex itself running its own transaction database. The blockchain is a common open platform for transactions, and that's useful.

They totally could. But what’s interesting about NFTs is they standardize this process across all kinds of assets and issuers. Instead of a CSV for Rolex, a Twitter history for an artist, a deed for a house, a rental agreement for an Airbnb, it’s all just one format.

In the past, there’s been tremendous value that’s come out of standardizing stuff, allowing infrastructure and new kinds of businesses to be built on top.

Some things are standardized with protocols: IP, TCP, SQL, etc.

Other things are standardized with storage formats: FAT, NTFS, etc.

NFTs fall into the latter bucket, with some conventions for the former but nothing as mature as a protocol.