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I’ve been trying to figure out NFTs and I can’t understand why they’re better than just using smart contracts. I threw together a contract in Solidity that wou

by biztos 6y ago

I’ve been trying to figure out NFTs and I can’t understand why they’re better than just using smart contracts. I threw together a contract in Solidity that would do all this and cut out the middleman / middlewinkelvii. It wasn’t hard. What am I missing? Why is the contract not the token?

wmf 6y ago
Throwing together a contract in Solidity is infinitely hard for most artists and it also makes the cloning problem (that several people in this thread have mentioned) even worse.
- biztos 6y ago
  I’m not suggesting every artist make their own, rather that a generic all purpose art sale/resale/royalty contract on the Ethereum blockchain seems easy-ish to do (I might try it) and then... just instantiate it with yourself as the artist and whatever signature you want? Sorry if that’s not the right word, but however one deploys a contract object. I don’t understand how this is any more susceptible to cloning or any other problem. Maybe also not less susceptible but I still don’t get the value add of the NFT versus basically just a good transparent contract with a few things stored. I do get the value add of the gallery/dealer but what’s their advantage in using the NFT instead of a contract? Is it just so Beeple can set numerology prices in USD? Still feel like I’m missing something fundamental here, I’m usually not more right than everyone else.
bookmarkable 6y ago
Is your contract on the blockchain? At what address can it be verified? If I buy it and trade it, can you verify or receive a royalty? That’s the token part.
- biztos 6y ago
  Yes, the contract would be on the Ethereum blockchain. If the contract stores the owner, how is it not the “token” at the same time? Royalties are pretty easy: contract knows the artist, artist gets say 10% of every resale, owner gets the rest, purchaser becomes new owner. Anyway this and NFT both have a big vulnerability around royalties: I can make some of the payment in cash if I want to cut out the artist.
  - langitbiru 6y ago
    > I can make some of the payment in cash if I want to cut out the artist. It depends on the smart contract. I can write a smart contract such that if you did that, the ownership of the art would be still the previous owner. The previous owner cannot change the ownership of the art to you without paying fee to the original artist.
    - biztos 6y ago
      I don’t think you actually can. I’m talking about collusion — I sell you the artwork for $X on the contract, but you also give me $Y for it in cash. Artist gets commission off $X, and nothing from $Y. And because it’s not an Actual Contract I haven’t broken the law. Do you have a solution to that?
      - bookmarkable 6y ago
        I'm not sure this is a real problem. If you gave a Christie's rep $10M for a modern art piece, and gave them another $1M cash and said "this is off the books" I'm sure they could write down the sale was really only $10M. But why would you do that? You are paying extra to shaft the artist of royalties? To devalue work you just purchased? What is the benefit in this transaction?
hrishi 6y ago
The problem (and the solution, in some cases) is the middlemen. You need to use a well-defined, pre-agreed interface (ERC-20 for tokens, and ERC-721 for NFTs I believe) so middlemen like OpenSea can understand and transact your NFT on their platform. If you don't need OpenSea or Rarible, you're free to define them however you like. Also, the reason the "token" is usually a location inside an array in the contract is primarily for gas (and legacy) reasons - storage on-chain is expensive, and it doesn't look like it's getting cheaper anytime soon.
biztos 6y ago
Just in case anyone is still on this thread, I have my answer. According to ERC-721, NFTs are just a way to have many owners and their tokens within a single contract. The advantage of which is.... I guess centralization.

by biztos 6y ago

wmf 6y ago

Throwing together a contract in Solidity is infinitely hard for most artists and it also makes the cloning problem (that several people in this thread have mentioned) even worse.

biztos 6y ago
I’m not suggesting every artist make their own, rather that a generic all purpose art sale/resale/royalty contract on the Ethereum blockchain seems easy-ish to do (I might try it) and then... just instantiate it with yourself as the artist and whatever signature you want? Sorry if that’s not the right word, but however one deploys a contract object. I don’t understand how this is any more susceptible to cloning or any other problem. Maybe also not less susceptible but I still don’t get the value add of the NFT versus basically just a good transparent contract with a few things stored. I do get the value add of the gallery/dealer but what’s their advantage in using the NFT instead of a contract? Is it just so Beeple can set numerology prices in USD? Still feel like I’m missing something fundamental here, I’m usually not more right than everyone else.

bookmarkable 6y ago

Is your contract on the blockchain? At what address can it be verified? If I buy it and trade it, can you verify or receive a royalty? That’s the token part.

biztos 6y ago
Yes, the contract would be on the Ethereum blockchain. If the contract stores the owner, how is it not the “token” at the same time? Royalties are pretty easy: contract knows the artist, artist gets say 10% of every resale, owner gets the rest, purchaser becomes new owner. Anyway this and NFT both have a big vulnerability around royalties: I can make some of the payment in cash if I want to cut out the artist.
- langitbiru 6y ago
  > I can make some of the payment in cash if I want to cut out the artist. It depends on the smart contract. I can write a smart contract such that if you did that, the ownership of the art would be still the previous owner. The previous owner cannot change the ownership of the art to you without paying fee to the original artist.
  - biztos 6y ago
    I don’t think you actually can. I’m talking about collusion — I sell you the artwork for $X on the contract, but you also give me $Y for it in cash. Artist gets commission off $X, and nothing from $Y. And because it’s not an Actual Contract I haven’t broken the law. Do you have a solution to that?
    - bookmarkable 6y ago
      I'm not sure this is a real problem. If you gave a Christie's rep $10M for a modern art piece, and gave them another $1M cash and said "this is off the books" I'm sure they could write down the sale was really only $10M. But why would you do that? You are paying extra to shaft the artist of royalties? To devalue work you just purchased? What is the benefit in this transaction?

hrishi 6y ago

The problem (and the solution, in some cases) is the middlemen. You need to use a well-defined, pre-agreed interface (ERC-20 for tokens, and ERC-721 for NFTs I believe) so middlemen like OpenSea can understand and transact your NFT on their platform. If you don't need OpenSea or Rarible, you're free to define them however you like. Also, the reason the "token" is usually a location inside an array in the contract is primarily for gas (and legacy) reasons - storage on-chain is expensive, and it doesn't look like it's getting cheaper anytime soon.

biztos 6y ago

Just in case anyone is still on this thread, I have my answer. According to ERC-721, NFTs are just a way to have many owners and their tokens within a single contract. The advantage of which is.... I guess centralization.