NFTs unbundle ownership from enjoyment
interjectedfuture.com
interjectedfuture.com
An NFT is 'genuine' solely because the artist says it is. Anyone can make another NFT of Beeple's $69m picture, and it will be identifiable on the blockchain, but it won't be the 'original' because Beeple says it isn't. In other words, none of this is decentralised, it's all based upon real world authority.
Despite all the crypto verbiage, blockchains don't add or enable anything with NFTs. The artist, or a company, could easily just maintain a database showing who 'owns' which artwork NFT, and could update it when works are re-sold. The fact that this runs right now on the blockchain is just because it provides an existing database (and a polluting, expensive and cumbersome one at that!)
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.
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 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.
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.
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.
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.
Even if the artist creates millions of tokens, there's probably prestige from having the first to be issued.
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?
Mind you, I'm not a blockchain fan, and I believe that blockchains and cryptocurrencies are the absolute worst way to solve the problem.
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).
The same questions also apply to blockchains. But if a blockchain is compromised, then who will I sue?
https://en.wikipedia.org/wiki/The_Physical_Impossibility_of_...
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".
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.
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).
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.
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.
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.
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).
> 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.
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.
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 whole point of artificial scarcity is that something can control and prevent the replication, otherwise it's not scarce.
It does not conver any legal ownership over the image. It does not confer copyright. Anybody else could come allow and create a new series of NFTs that include a token pointing to the same art, and sell it too.
NFTs are basically equivalent to those pieces of paper that claim ownership over a plot on the moon that get sold. Anybody can make them and sell them, and they have zero legal ramification.
The only thing that makes a particular NTF that points at a work of art special is if it is endorsed by somebody.
This can have meaning though. While anybody can make baseball cards for any player for any year, only those made (endorsed) by certain companies have any value in the collector's market (and only certain players and certain years).
But even then at least you really do legally own a physical piece of paperboard.
NFTs are more akin to owning a unique item in a video game, except at least with those you can usually use the item.
I think your critique of NFTs is mostly valid. Until there is some legal validity to them recognized by governments, they are basically just, well, tokens of ownership. The same could be said about most property or IP at some point in time :)
They are not even "tokens of ownership"; they're just tokens that one owns, nothing more, but the semantic distinction here is significant, because a token cannot own anything outside of itself.
Why don't they? If NFTs tokenized ownership of the copyright of the referenced media (maybe through some kind of transferable copyright assignment contract linked to the given token), then maybe they wouldn't be total bullshit.
Meaning that, if they did confer copyright, maybe they actually would be useful and a good idea.
Because you can sell people a token for $$$ (at least theoretically) without even giving up real ownership of the IP.
If you're ever actually licensing IP the rights holder is going to grant as little freedom as possible for the most money possible. No freedom for lots of money is the ideal from that POV.
Even though it's not physical, it's exactly like owning a baseball card or a work of art. On their own, those things have no intrinsic value. Just like an NFT, they have value because the creator endorsed them, and other people put value in that endorsement.
And just like an NFT again, you do not have the right to reproduce a baseball card or work of art just because you purchased it.
But there is no original with digital files. Everything is copied endlessly and with perfect fidelity. In fact everyone has made a copy just by viewing it.
you're confused.
You don't own anything with an NFT other than a pointer. so it's not like owning a work of art at all. NFT's do not give you ownership over a work of art.
I'm not saying that Everydays or CryptoPunk #7804 NFTs aren't valuable. They probably are, as historic firsts. But I don't think they prove the existence of a long tail of long-term value of similar tokens.
In my opinion, an NFT actually becomes useful when it represents a right that is decoupled from one specific asset. More like a tradable auth role. In effect, a tradable identity. That would actually merit decentralization, such that any provider that respects that role could use it to authorize access to some asset or experience. Even still, this could be centralized, but I think it's a step closer to enabling something truly novel, rather than simply trying to reproduce mutual exclusive ownership of a physical object.
We do have something like that already, the Ethereum Name Service, or ENS. It's basically DNS for Ethereum wallet addresses. Because wallets represent an owner, they're like an identity.
ENS names look like `acjohnson.eth`, and they're NFTs. That means they're also tradable on exchanges and marketplaces.
Unlike DNS, the entire ENS lookup and auction mechanism is on-chain. That means, there's no single point of failure, and given the contracts were written right (still hard to do), shuts down specific vector of attacks.
Also, DNS and ENS names are both rented, rather than owned.
I think the whole NFT for art thing is probably here to stay but not likely to ever be important to the vast majority of the public that never went shopping in real world art galleries.
In practice, this would work for any venue that sells tickets to anonymous buyers, but most sufficiently in-demand events at least pay some lip service to trying not to do that to avoid getting all of their tickets purchased by professional scalping operations using bots.
Another note is - I'm not sure if NFTs are used for money laundering (they probably are) - but I'd love to watch something like Breaking Bad in the modern time. Money laundering I imagine would be so easy now. Literally just use your drug money, buy a bunch of computers, mine crypto, buy useless NFTs, trade that around a few times, sell your NFT. Boom. Clean money. There's absolutely no need to do convoluted things like bribe a politician to open a casino or open a laundry mat anymore.
In the hypothetical case that Pokemon start showing up in Facebook, then that's only because Nintendo has a licensing agreement with Facebook with established guidelines and limits for usage of intellectual property.
NFTs are amazing because they unbundle enjoyment from ownership, but still allow you to pay. What an innovation /s
Conversely, you can turn anything into an NFT whether you own it or not and then sell it: https://www.vice.com/en/article/n7vxe7/people-are-stealing-a...
The truth is it’s much more likely the frothy Bitcoin market is overflowing into other similar products - almost all the most recent news making headlines have been about transactions amongst people who gained all their wealth through Bitcoin in the first place. It’ll go to 0 next time Bitcoin does, and whilst Bitcoin will probably bounce back, lots of these new shitcoin alternatives won’t.
[1] https://www.ft.com/content/a5beb8e2-5334-11ea-90ad-25e377c0e...
I really don't get NFTs. I feel like every article I read about them (even the critical ones) is describing them in a way which then turns out to be far more mundane.
People (such as the author here) talk about how they are the digital equivalent of trading cards. Pokemon, M:TG etc work because the cards themselves are hard to accurately duplicate. But the images and other digital items supposedly traded via NFTs can all be duplicated easily, like any other file on a computer. The only thing you get here is a record in a database with your (virtual) name on it next to a hash of the file. That's it. It's not even like your 'ownership' according to this database would have any legal implications.
A real world example might be a card system where anyone could easily scan and print out the same card as the one you own, but that in some database somewhere, there's a record of your ownership of the card. It doesn't matter. Everyone has a copy of your card anyway. The reality is that you aren't the owner of it, whatever your protestations.
* If the tickets to concerts were NFTs, you could limit forum access to concert attendees as proven by their NFTs. * If purchase of a digital album was connected to NFTs, a band could offer a special perk to their original fans.
Personally, I don't get the art thing. Good art is inherently valuable because viewer of the art (my eyes) are built directly into my body. In 1,000 years it is entirely possible no one is going to be able to view a jpeg, or the host of the image has disappeared off the internet. Even URLs that don't disappear are problematic, you want a URL the connected to the hash of the file contents so you can be assured that the file is never changed.
Currently it seems to just be a status symbol, but I feel like it could evolve into a newfangled version of license keys - i.e. proof that you're authorized to have a copy at all, or that you're licensed to incorporate a work in your own work (e.g. songs in videos, or photos on websites, or what have you).
I mean yeah, but it's all just semantics in the end, isn't it? The art (or whatever else) may have been made for you, but it doesn't matter- de facto, it's in the public realm. I'm over here, enjoying the thing, even if some database somewhere says you own it.
As for the license keys idea, is that such a big problem? Do people actively go around stealing license keys from other people? Willingly making copies for your friends and colleagues, sure, but that's no different to giving your friends and colleagues the private key tied to the token, which presumably would be possible if you create a new one per transaction.
That would also give said friends and colleagues the ability to sell your license on the cheap.
Which is what I'm getting at: an NFT-like licensing system would make it possible to formally transfer the rights conferred by that license to someone else, without the original vendor needing to be in the loop. And further, it basically replaces the notion of product registration, since that registration is built into the license: whoever owns the token for that license is automatically the registered user.
And on that note:
> Do people actively go around stealing license keys from other people?
Yes, all the time. A large chunk of the market for Windows product keys in particular comes from people "stealing" them; it's a big reason why sharing photos of product key stickers on computers is typically a bad idea.
An NFT-ish license system would eliminate this sort of product key swiping and actually legitimize product key resale/transfer, so it's a win-win-win as far as the original vendor, resellers, and buyers/users are concerned. Pirates suffer a bit, though, since it wouldn't be enough to just generate a key from scratch anymore (but that's what cracks are for, yaharrr).
The group that bought it has LOTS of money invested in crypto (and Flow, an NFT focused blockchain) so they benefited by increasing demand for the ecosystem as a whole. Whales can move markets.
Same reason people will pay $100 for a Supreme T-shirt, when the same plain white tee sells for $10.
> But as it turns out, you can make digital things scarce, through cryptography.
The art isn't stored on-chain, so it's not scarce either.
All the NFT is is a pointer that has some text about who created it and what it points to. Not sure why why that pointer itself is valuable except as a status of "i am the only one that owns this unique pointer".
Of course there's nothing stopping anyone from creating another pointer that points to the same thing as the one you just bought and selling that.
So unless you find some value in pointers, intrinsically in themselves, NFT's are useless.