I don't see how digital IOUs is anything novel or invented by tokenbros. Paper or digital, it's the same this essentially.
NFTs... How EXACTLY does NFT "holds custody" of anything? Please describe what do you mean by that.
A practical example of an application on top of this is namespace aliases that are held non custodially by the users through an ERC721 contract - see ENS. The user's private key gives them access to a record within a smart contract, allowing them to update some state or transfer ownership of the data object.
I will clarify my question better now, hopefully. How EXACTLY does NFT "hold custody" of anything not living fully on on the blockchain already? So any physical object, or any digital object outside of cryptotokens and DNS records on the blockchain.
I am not suggesting it does. I am suggesting it allows you to hold ownership of an asset on the blockchain. At this point it means ENS, art, collectibles, loans, stablecoin positions, user accounts, and other assets that can be defined digitally and on chain.
At some point in the future, property laws might change to recognize crypto tokens as their own asset class, which would make possible things like having some claim of ownership over a gold bar based on holding a NFT. Many investors today hold gold in their portfolio without it physically being transferred to them. Instead, ownership of the assets is recorded on some ledger, which could be a public ledger.
Mattereum is working in this space, trying to tokenize gold bullion, wine[1], and recently real estate[2] with legal warranty, but I would not put much stock in this idea until there is more clarity from lawmakers.
[1] https://www.businesswire.com/news/home/20220624005079/en/IG-...
[2] https://www.businesswire.com/news/home/20220731005030/en/Mat...
- art - no
- collectibles - no
- loans - as in "loan your NFTs"? Technically yes, but since NFTs are worthless bullshit it is kinda pointless.
- stablecoins positions - please elaborate, never heard this idea before
- use accounts - no
- other on chain assets - yes
- other off chain assets - no
tl;dr - NFTs themselves lack any ability to provide proof of ownership, transfer IP rights, or hold custody simply because it is technically impossible. Any cadaver constructs which allows this are inevitably an additional centralised systems which do all the actual work and actually store digital data. NFTs are fifth leg in a horse - pointless and useless. (DNS records alone of course don't justify NFT existence)
Loans and DeFi - see Uniswap issuing ERC721 Liquidity Pool tokens.
User accounts - exact same mechanism as ENS, but different namespace specific to a protocol. See Lens protocol for example.
- all these protocols are beta software, less than a few years old. Uniswap as one of the oldest is probably also the most secure.
- NFT: ability to hold custody over a digital record without relying on a single private company's servers to uphold that. But I expect you will move the goalposts...
- Cryptography: take a minute to look at developments in ZKP, MPC, new signature schemes. Many uses outside of pure blockchain[1].
- BigCorp: because they can extract value from it. If 5% of Shopify or PayPal users want to use crypto payments, the company can support that method and charge rent on it. Or they can ignore crypto, and let another company absorb the potential revenue. But because they like profit, this is why we see Shopify, Stripe, and PayPal all integrating crypto currency.
[1] https://blog.cloudflare.com/introducing-zero-knowledge-proof...