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>NFTs are blockchain-based records that uniquely represent pieces of media. There is a jpg of an artwork on the internet that anyone can view and copy. There's

>NFTs are blockchain-based records that uniquely represent pieces of media. There is a jpg of an artwork on the internet that anyone can view and copy. There's also a non-fungible token that's linked to this jpg. I just don't see how NFT proponents want to make the actual connection between the one and the other in a way that's both decentralized and unique. - You can have some authority that says "THIS artwork belongs to THIS token". Then, you don't need blockchain, because you have a central authority. - You can encode the relation on-chain by e.g. taking an md5 of the jpg. How do you know which token claiming to be "the unique token for that jpg" is the real unique one? Even if there is a class of token that preserves uniqueness, it can only do that internally within the class, we're back to the previous point of needing some centralized allocation to say which class of tokens is the real one. Edit: for the last point, you can take the one with the earliest timestamp of course, as per another comment. Anything I missed? Has anyone even thought about this in-depth? Are a16z's crypto dabblings just empty hype chasing?

sombremesa 6y ago
As far as I can tell, this is indeed all 'empty hype chasing' on the part of the founders, but the people who actually believe in it probably end up trusting in a central authority - which means a database would have sufficed. Still, it's amazing how many people are willing to shell out money for this - many of them are likely trying to sell their acquisitions to the next sucker, though.
pilingual 6y ago
“You can have some authority that says "THIS artwork belongs to THIS token". Then, you don't need blockchain, because you have a central authority.” You need blockchain because central authorities can shut it down; however, most smart contracts in this space are centrally controlled. I think the reason people struggle to understand how NFTs make sense is because it is new and there is no mental model for it. It’s easy to dismiss, but if you think about it and in particular if you program an ERC721 contract and/or use it, you begin to get it. Younger generations won’t need to do this because it’ll just be the way things are. You won’t trade MtG cards but NFTs. You may be in a VR game and see a work on art on the wall and buy it right there for your collection. It is absolutely legit regardless of the mania or the fact that contracts aren’t decentralized (yet).
- vorpalhex 6y ago
  But why do I need the NFT if it's just a jpg and I can copy it from the game source?
  - Sevii 6y ago
    Why is an original Picasso worth millions when I can download a picture of one and print it out for free?
    - vorpalhex 6y ago
      The picture of the picasso is not identical to the original. A jpeg is bit for bit identical when copied.
      - iamwil 6y ago
        It's not considered original, if you don't own the NFT. Like money, it's a social contract. For the longest time, in order to enjoy something, you had to own it. Because physically, there was no way to enjoy it unless you were in its physical presence. Then we had analog tech like photography, and for a little while, people wrestled with who owned what. But we decided that the original physical painting is proof of ownership, and a photograph of it can still be enjoyed, but is worth less, and not actually owned. This makes sense, because the physical copy is less easy to reproduce. And now, we've figured out how to make digital things scarce. Now, the ownership of something is indicated by ownership of the NFT, not of the physical original work of something. The tie between the NFT and the digital image is largely a social contract, in the same way that money is a social contract.
        robbiep 6y ago
        You’ve made the same point about scarcity here but i think most people just can’t buy it. It is literally not scarce
        6y ago
iamwil 6y ago
I also use to kinda wonder about the connection between the onchain data, and the offchain reality, especially when people talk about using blockchains for supply chains. What mechanism do you have in place to get them to sync? But when it came to NFTs and art, I think it lines up. It use to be the enjoyment of a piece was inextricably tied with the ownership of something. It was the way physics worked. And then, we had photography and subsequently digital tech, and now we are able to separate the ownership of a piece from the enjoyment of a piece through a digital copy. Now you can enjoy a piece without ownership! But aghast! What does that mean for value of ownership? Well, the social contract we all collectively came up with is that the original physical piece is worth a lot, and a copy isn't, regardless of the technique. And we have lots of mechanisms in society to enforce that, from people that specialize in detecting fakes to the court of law. It also kinda worked, because while you could digitize the painting, you couldn't digitize the ownership of an art piece--because there was only still one original. So the ownership (not the enjoyment) of a art was still scarce due to physics and not digital, because for the longest time, we didn't know how to make digital things scarce and original. In fact, we thought that's why digital was so great. No cost duplication has changed the world. But, apparently, you can make digital things scarce. Through cryptography. So if you view this as a progression of the separation of ownership and enjoyment, the enjoyment got digitized first. And now, we're seeing ownership being digitized. But ownership is kinda weird because it's both digital and scarce! Back to the connection, I think the connection is simply a social contract in the way money is a social contract. "This NFT represent an ownership for this art piece." I think there are ways around it, for future works. I can imagine art pieces being procedurally generated by a computer, but hand picked by the artist. The artist then records the parameters for the procedural generation inside of the NFT. Then, any owner for the NFT will be able to generate the art, and that would be the connection. At the end of the day, that still relies on some social contracts, like agreement that these parameters is applied by this procedural generation algorithm, etc.
- robbiep 6y ago
  I can understand it if wrapping crypto/some form of chain around a piece of digital media made it non-fungible. But that is horseshit (afaict), as the op’s analogy goes. It’s not making or scarce, it’s making up to a billion people be able to ‘own’ a part of it. And it’s digital so anyone can copy it. It doesn’t even come in a nice frame. I realise this is just having a go at a single part of your conversation, that I otherwise have no issue with
wpietri 6y ago
I'm mostly in the "empty hype chasing" bucket. As with many things in the blockchain space, I think there are a few interesting idealists whose work could be seen as fun, compelling experiments. But because of the cryptocurrency bubble, anything like that immediately gets turned into OMG FUTURE YOU MUST BUY NOW. Which for me ruins it, and certainly breaks key product development feedback loops. One minor thing I'd add to your picture; the potential for competing NFT authorities. Bitcoin, which was sold as inflation-proof because there are only so many of them, now has 250+ competitors with nominal market values of over $100m. If the NFT thing works at all, a bunch of hucksters will immediately set up in competition, and there surely will be a lot of duplicate registration in different spots. ("I own goatse!" No, I own goatse!") In which case, the only way to determine actual ownership of a given MD5 is provenance from the artist. I can't find it now, but some genius on Twitter suggested creating an NFT registry for physical bridges, so George C Parker can live again a century later. https://en.wikipedia.org/wiki/George_C._Parker https://en.wikipedia.org/wiki/George_C._Parker
biztos 6y ago
I’m just learning about this stuff, but it seems to me that the NFT is mostly just a blockchainy version of the good old “certificate of authenticity” which artists and galleries have provided for ages. Last year I bought some fine art photographs. They were “giclee” which is a fancy word for ink jet. They were signed and numbered. I got my certificates. The artist, or whoever has a copy of the original digital image, can make unlimited prints. They can even make better prints! The only thing stopping them is that the art world has decided to have this made-up rarity and to treat the certificate of authenticity as a guarantee of, well, “authenticity,” whatever that means for a digital photograph or for that matter a shiny metal balloon dog. So one thing the NFT claims to be is that certificate, especially as applied to work that was meant to be experienced on a screen.
- ckozlowski 6y ago
  I'm thrilled the see this discussion on here, and you're very correct. There's nothing stopping the artist from making more digital prints. And this is currently why at art shows you see original, physical media pieces (oil, acrylic, watercolor) going for high prices, while digital art has seemingly no collectability. Some years ago, I was at an art convention https://ix-online.com/default.asp https://ix-online.com/default.asp) and was discussing this with a couple of collectors one evening, asking if they'd ever buy an "original" digital piece. And they indicated that they would, but only if it either had some sort of embellishment making it truly original as a print (Artist signature on the print, maybe a message or small sketch on the back, etc) or, some sort of agreement, be it binding or on pain of loss of reputation, that more prints in the series wouldn't be made. In other words, something to make it rare. The only digital pieces I've seen go in excess of four figures are ones that have been "hand embellished", that is, the artist drew their image on the computer, printed it, and then went back over with a physical medium to give it the look of traditional media. And since that can (currently?) only be done by hand, that makes it unique, and therefor to collectors, valuable. And these works are not only valuable in the sense that the individual enjoys it, but many works appreciate and grown in value as the artist grows and so become an investment as others now want to own that unique work. I'm married to a fantasy illustrator who works in a digital medium, and while I'd love to see her art be juried into the same showcases I see reserved for the physical medium, the flawless reproducibility that's possible seems to deter collectors more than some certificate that says "I own this" does. Perhaps over time that digital signature will eventually be valued more to the collectors than the rarity, but in everything I've seen, for an art collector, holding up your blockchain when everyone else can fulfill their demand for that work and obtain the same quality is cold comfort. I'm really interested to see if anything becomes of these, but currently I'm more skeptical than optimistic.
throwaway_kufu 6y ago
> Anything I missed? Has anyone even thought about this in-depth? Yes. I think you are taking the most poorly executed NFT (a token and jpeg centrally hosted on the internet) and extending that to all NFTs. There is no right or wrong way to make these NFTs, and a jpeg/token may work for many use cases anyway...but I can certainly accomplish and satisfy all your issues/concerns. That is create a unique digital artwork that is hosted on the blockchain represented by an NFT that is all self authenticating without the need of any central authority...unless you are classifying the ethereum blockchain as the central authority
ohazi 6y ago
Even if they do manage to make it unique, who actually cares? You have a token and a jpeg. I have the exact same jpeg. It's not an original in a gallery vs. a mass market print, the copies are identical. Why should anyone care about who owns the damn token?
- CryptoPunk 6y ago
  There are cultural currents that place a value on ownership of intellectual property. Imagine various MMOGs recognizing some NFT standard as authoritative, and only allowing designs to be used for character skins if the gamer owns the NFT corresponding to the design.
  - meheleventyone 6y ago
    As far as I can tell NFTs don’t actually give ownership of the IP. It’s not like the NFT owner could go around DMCAing other copies of the work?
    - CryptoPunk 6y ago
      You're right, they provide a verifiable testament of the creator's will as to who should have ownership rights over the IP, which is enough to provide ownership rights in many contexts.
127 6y ago
Timestamps
bhawks 6y ago
To add a perspective outside of high value art - NFTs have an interesting potential to change the virtual goods space ($XX billion dollar industry). Today Fortnite and games like it get major revenue streams via selling special skins, game items and other art work. Now name a property that let's you trade or gift items? If you can name any - do they let you trade on ebay? How many platforms let 3p artists contribute to the platform? I don't think you can honestly describe this market place as anything but primitive. NFTs solve the hard problem of accounting for virtual goods in a wildly open, secure and interoperable way. They can codify an incentive structure that allows trading on a secondary market while ensuring creators, platform owners, and even former owners can receive percentage royalties. You could easily imagine Fortnite's Ninja streamer selling one of his skins on a stream to a fan for a significant premium - and some of that revenue could be codified to flow to the platform, the artist that made it, heck ninja could set it up that any later sales send 5% to a food bank. Thats just one reason for me why NFTs are a high potential technology. Are there challenges? Tons of them (look at eth gas prices...) But it doesn't seem insurmountable. Ultimately there is utility and value. Definitely not hype.
- anonisko 6y ago
  It could get even more interesting if you have some NFT domains that are shared between different virtual realms, like different video games or social media sites. Imagine owning a username in the form of an NFT, and every MMO game that integrates with that system will ensure that the owner and only the owner of that name can can use it in game.
ButtSpark69 6y ago
The real mona lisa has massive real-world value. You can get a copy of the mona lisa that the average person can't distinguish between for $10.99, and yet that copy in no way reduces the value of the real mona lisa (if anything it increases it). Things that are intentionally non-fungible don't care much about being copied, as long as you can always identify a copy, at the end of the day it's mostly a status game. But status games do have real-world value.
alexmingoia 6y ago
The authority is the artist. They say which token is the certificate of authenticity.
CryptoPunk 6y ago
The ownership is only a matter of social consensus, and those rights can be eroded through various avenues. Still, the consensus is perceived as having enough strength to give the NFTs value.
- meheleventyone 6y ago
  Is the value the sense of ownership or just from people trading them like other crypto?
  - CryptoPunk 6y ago
    It's hard to know which comes first. It's a bit like Keynes' Beauty Contest: https://en.wikipedia.org/wiki/Keynesian_beauty_contest https://en.wikipedia.org/wiki/Keynesian_beauty_contest The verifiability aspect seems to create a Schelling point where they attain and maintain value.
splintercell 6y ago
Most NFT use cases which are emerging right now are essentially legal ownership created to the owner of NFT token. In other words let's say there is a unique painting, now they established that the owner of a certain nft gets to own certain rights over that painting which could be licensing or other rights. NFTs have essentially decoupled the ownership of a role of a contract with the transference of that assignment to an individual. Instead of modifying the owner who has the claim on a certain piece of art or object by modifying a document, they are simply using blockchain to establish the ownership of a token and token links it's owner to the contract.

sombremesa 6y ago

As far as I can tell, this is indeed all 'empty hype chasing' on the part of the founders, but the people who actually believe in it probably end up trusting in a central authority - which means a database would have sufficed. Still, it's amazing how many people are willing to shell out money for this - many of them are likely trying to sell their acquisitions to the next sucker, though.

pilingual 6y ago

“You can have some authority that says "THIS artwork belongs to THIS token". Then, you don't need blockchain, because you have a central authority.” You need blockchain because central authorities can shut it down; however, most smart contracts in this space are centrally controlled. I think the reason people struggle to understand how NFTs make sense is because it is new and there is no mental model for it. It’s easy to dismiss, but if you think about it and in particular if you program an ERC721 contract and/or use it, you begin to get it. Younger generations won’t need to do this because it’ll just be the way things are. You won’t trade MtG cards but NFTs. You may be in a VR game and see a work on art on the wall and buy it right there for your collection. It is absolutely legit regardless of the mania or the fact that contracts aren’t decentralized (yet).

vorpalhex 6y ago
But why do I need the NFT if it's just a jpg and I can copy it from the game source?
- Sevii 6y ago
  Why is an original Picasso worth millions when I can download a picture of one and print it out for free?
  - vorpalhex 6y ago
    The picture of the picasso is not identical to the original. A jpeg is bit for bit identical when copied.
    - iamwil 6y ago
      It's not considered original, if you don't own the NFT. Like money, it's a social contract. For the longest time, in order to enjoy something, you had to own it. Because physically, there was no way to enjoy it unless you were in its physical presence. Then we had analog tech like photography, and for a little while, people wrestled with who owned what. But we decided that the original physical painting is proof of ownership, and a photograph of it can still be enjoyed, but is worth less, and not actually owned. This makes sense, because the physical copy is less easy to reproduce. And now, we've figured out how to make digital things scarce. Now, the ownership of something is indicated by ownership of the NFT, not of the physical original work of something. The tie between the NFT and the digital image is largely a social contract, in the same way that money is a social contract.
      - robbiep 6y ago
        You’ve made the same point about scarcity here but i think most people just can’t buy it. It is literally not scarce
        6y ago

iamwil 6y ago

I also use to kinda wonder about the connection between the onchain data, and the offchain reality, especially when people talk about using blockchains for supply chains. What mechanism do you have in place to get them to sync? But when it came to NFTs and art, I think it lines up. It use to be the enjoyment of a piece was inextricably tied with the ownership of something. It was the way physics worked. And then, we had photography and subsequently digital tech, and now we are able to separate the ownership of a piece from the enjoyment of a piece through a digital copy. Now you can enjoy a piece without ownership! But aghast! What does that mean for value of ownership? Well, the social contract we all collectively came up with is that the original physical piece is worth a lot, and a copy isn't, regardless of the technique. And we have lots of mechanisms in society to enforce that, from people that specialize in detecting fakes to the court of law. It also kinda worked, because while you could digitize the painting, you couldn't digitize the ownership of an art piece--because there was only still one original. So the ownership (not the enjoyment) of a art was still scarce due to physics and not digital, because for the longest time, we didn't know how to make digital things scarce and original. In fact, we thought that's why digital was so great. No cost duplication has changed the world. But, apparently, you can make digital things scarce. Through cryptography. So if you view this as a progression of the separation of ownership and enjoyment, the enjoyment got digitized first. And now, we're seeing ownership being digitized. But ownership is kinda weird because it's both digital and scarce! Back to the connection, I think the connection is simply a social contract in the way money is a social contract. "This NFT represent an ownership for this art piece." I think there are ways around it, for future works. I can imagine art pieces being procedurally generated by a computer, but hand picked by the artist. The artist then records the parameters for the procedural generation inside of the NFT. Then, any owner for the NFT will be able to generate the art, and that would be the connection. At the end of the day, that still relies on some social contracts, like agreement that these parameters is applied by this procedural generation algorithm, etc.

robbiep 6y ago
I can understand it if wrapping crypto/some form of chain around a piece of digital media made it non-fungible. But that is horseshit (afaict), as the op’s analogy goes. It’s not making or scarce, it’s making up to a billion people be able to ‘own’ a part of it. And it’s digital so anyone can copy it. It doesn’t even come in a nice frame. I realise this is just having a go at a single part of your conversation, that I otherwise have no issue with

wpietri 6y ago

I'm mostly in the "empty hype chasing" bucket. As with many things in the blockchain space, I think there are a few interesting idealists whose work could be seen as fun, compelling experiments. But because of the cryptocurrency bubble, anything like that immediately gets turned into OMG FUTURE YOU MUST BUY NOW. Which for me ruins it, and certainly breaks key product development feedback loops. One minor thing I'd add to your picture; the potential for competing NFT authorities. Bitcoin, which was sold as inflation-proof because there are only so many of them, now has 250+ competitors with nominal market values of over $100m. If the NFT thing works at all, a bunch of hucksters will immediately set up in competition, and there surely will be a lot of duplicate registration in different spots. ("I own goatse!" No, I own goatse!") In which case, the only way to determine actual ownership of a given MD5 is provenance from the artist. I can't find it now, but some genius on Twitter suggested creating an NFT registry for physical bridges, so George C Parker can live again a century later. https://en.wikipedia.org/wiki/George_C._Parker https://en.wikipedia.org/wiki/George_C._Parker

biztos 6y ago

I’m just learning about this stuff, but it seems to me that the NFT is mostly just a blockchainy version of the good old “certificate of authenticity” which artists and galleries have provided for ages. Last year I bought some fine art photographs. They were “giclee” which is a fancy word for ink jet. They were signed and numbered. I got my certificates. The artist, or whoever has a copy of the original digital image, can make unlimited prints. They can even make better prints! The only thing stopping them is that the art world has decided to have this made-up rarity and to treat the certificate of authenticity as a guarantee of, well, “authenticity,” whatever that means for a digital photograph or for that matter a shiny metal balloon dog. So one thing the NFT claims to be is that certificate, especially as applied to work that was meant to be experienced on a screen.

ckozlowski 6y ago
I'm thrilled the see this discussion on here, and you're very correct. There's nothing stopping the artist from making more digital prints. And this is currently why at art shows you see original, physical media pieces (oil, acrylic, watercolor) going for high prices, while digital art has seemingly no collectability. Some years ago, I was at an art convention https://ix-online.com/default.asp https://ix-online.com/default.asp) and was discussing this with a couple of collectors one evening, asking if they'd ever buy an "original" digital piece. And they indicated that they would, but only if it either had some sort of embellishment making it truly original as a print (Artist signature on the print, maybe a message or small sketch on the back, etc) or, some sort of agreement, be it binding or on pain of loss of reputation, that more prints in the series wouldn't be made. In other words, something to make it rare. The only digital pieces I've seen go in excess of four figures are ones that have been "hand embellished", that is, the artist drew their image on the computer, printed it, and then went back over with a physical medium to give it the look of traditional media. And since that can (currently?) only be done by hand, that makes it unique, and therefor to collectors, valuable. And these works are not only valuable in the sense that the individual enjoys it, but many works appreciate and grown in value as the artist grows and so become an investment as others now want to own that unique work. I'm married to a fantasy illustrator who works in a digital medium, and while I'd love to see her art be juried into the same showcases I see reserved for the physical medium, the flawless reproducibility that's possible seems to deter collectors more than some certificate that says "I own this" does. Perhaps over time that digital signature will eventually be valued more to the collectors than the rarity, but in everything I've seen, for an art collector, holding up your blockchain when everyone else can fulfill their demand for that work and obtain the same quality is cold comfort. I'm really interested to see if anything becomes of these, but currently I'm more skeptical than optimistic.

throwaway_kufu 6y ago

> Anything I missed? Has anyone even thought about this in-depth? Yes. I think you are taking the most poorly executed NFT (a token and jpeg centrally hosted on the internet) and extending that to all NFTs. There is no right or wrong way to make these NFTs, and a jpeg/token may work for many use cases anyway...but I can certainly accomplish and satisfy all your issues/concerns. That is create a unique digital artwork that is hosted on the blockchain represented by an NFT that is all self authenticating without the need of any central authority...unless you are classifying the ethereum blockchain as the central authority

ohazi 6y ago

Even if they do manage to make it unique, who actually cares? You have a token and a jpeg. I have the exact same jpeg. It's not an original in a gallery vs. a mass market print, the copies are identical. Why should anyone care about who owns the damn token?

CryptoPunk 6y ago
There are cultural currents that place a value on ownership of intellectual property. Imagine various MMOGs recognizing some NFT standard as authoritative, and only allowing designs to be used for character skins if the gamer owns the NFT corresponding to the design.
- meheleventyone 6y ago
  As far as I can tell NFTs don’t actually give ownership of the IP. It’s not like the NFT owner could go around DMCAing other copies of the work?
  - CryptoPunk 6y ago
    You're right, they provide a verifiable testament of the creator's will as to who should have ownership rights over the IP, which is enough to provide ownership rights in many contexts.

127 6y ago

Timestamps

bhawks 6y ago

To add a perspective outside of high value art - NFTs have an interesting potential to change the virtual goods space ($XX billion dollar industry). Today Fortnite and games like it get major revenue streams via selling special skins, game items and other art work. Now name a property that let's you trade or gift items? If you can name any - do they let you trade on ebay? How many platforms let 3p artists contribute to the platform? I don't think you can honestly describe this market place as anything but primitive. NFTs solve the hard problem of accounting for virtual goods in a wildly open, secure and interoperable way. They can codify an incentive structure that allows trading on a secondary market while ensuring creators, platform owners, and even former owners can receive percentage royalties. You could easily imagine Fortnite's Ninja streamer selling one of his skins on a stream to a fan for a significant premium - and some of that revenue could be codified to flow to the platform, the artist that made it, heck ninja could set it up that any later sales send 5% to a food bank. Thats just one reason for me why NFTs are a high potential technology. Are there challenges? Tons of them (look at eth gas prices...) But it doesn't seem insurmountable. Ultimately there is utility and value. Definitely not hype.

anonisko 6y ago
It could get even more interesting if you have some NFT domains that are shared between different virtual realms, like different video games or social media sites. Imagine owning a username in the form of an NFT, and every MMO game that integrates with that system will ensure that the owner and only the owner of that name can can use it in game.

ButtSpark69 6y ago

The real mona lisa has massive real-world value. You can get a copy of the mona lisa that the average person can't distinguish between for $10.99, and yet that copy in no way reduces the value of the real mona lisa (if anything it increases it). Things that are intentionally non-fungible don't care much about being copied, as long as you can always identify a copy, at the end of the day it's mostly a status game. But status games do have real-world value.

alexmingoia 6y ago

The authority is the artist. They say which token is the certificate of authenticity.

CryptoPunk 6y ago

The ownership is only a matter of social consensus, and those rights can be eroded through various avenues. Still, the consensus is perceived as having enough strength to give the NFTs value.

meheleventyone 6y ago
Is the value the sense of ownership or just from people trading them like other crypto?
- CryptoPunk 6y ago
  It's hard to know which comes first. It's a bit like Keynes' Beauty Contest: https://en.wikipedia.org/wiki/Keynesian_beauty_contest https://en.wikipedia.org/wiki/Keynesian_beauty_contest The verifiability aspect seems to create a Schelling point where they attain and maintain value.

splintercell 6y ago

Most NFT use cases which are emerging right now are essentially legal ownership created to the owner of NFT token. In other words let's say there is a unique painting, now they established that the owner of a certain nft gets to own certain rights over that painting which could be licensing or other rights. NFTs have essentially decoupled the ownership of a role of a contract with the transference of that assignment to an individual. Instead of modifying the owner who has the claim on a certain piece of art or object by modifying a document, they are simply using blockchain to establish the ownership of a token and token links it's owner to the contract.