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There’s a massive forgery issue with physical items - Shoes, Fashion Brands, Art. The benefit of NFT for psychical goods isn’t so much proving who the current

There’s a massive forgery issue with physical items - Shoes, Fashion Brands, Art. The benefit of NFT for psychical goods isn’t so much proving who the current owner is as much as it is proving the historical ownership so the authenticity of an item can be ensured. You don’t need a central government for this. For example, as long as you know Nikes address, I can confirm a shoe I want to buy is truly authentic by verifying that address is the original owner.

randomopining 6y ago
How do you attach a digital address to a physical item? Let’s say I buy a Nike shoe and then give 10 fake Nike shoes the same digital address. They are amazing fakes. Same issue as today right? Unless there is a clever crossover to convert from digital verification to physical and back... seems worthless to me.
- drcode 6y ago
  Well, for any collectible item an important factor is "provenance", i.e. is there a legitimate reason to believe the item originated from a credible source. At least nfts now require people to also forge the provenance, which provides an additional hurdle to forgers (my best attempt to steelman the "pro nft" argument) For instance, if a great great grandson of Henry VII sells a medallion that he claims belonged to his ancestor, that would have more weight than a similar medallion from a random individual, because it's far less likely for a relative to also be a blatant forger. In theory at least, nfts provide a similar (limited) assurance.
  - TheCapeGreek 6y ago
    The difference is provenance with NFTs is about the NFT itself, but not the item. Like mentioned elsewhere here, block # and timestamp will differ. But digital items don't have provenance. To put it another way: the analogue is not original medallion vs new fake one. They're both 100% identical medallions in every conceivable way, but the receipt for one is older than the other. I don't know about you but I don't give a damn if your receipt is older than mine if the items are not unique in any way.
- roywiggins 6y ago
  The only thing I can think of is embedding a physical unclonable function into the thing. As long as Nike holds on to custody of the physical tokens and only embeds them in real Nike products, then you could verify with the Nike database that it's a real token and a real product. But you don't need a blockchain for that. https://en.m.wikipedia.org/wiki/Physical_unclonable_function https://en.m.wikipedia.org/wiki/Physical_unclonable_function
  - chrisco255 6y ago
    Sure you do. Nike could go out of business and their records lost forever. Nike could suffer a hack. Nike could have a rogue employee manipulate the database values. Nike could be thrown off the internet by AWS. A public blockchain like Ethereum is plausibly neutral, decentralized into tens of thousands of nodes worldwide who carry copies of the ledger, and there is a strong economic incentive baked into the blockchain to keep blocks consistent and persistent. And if you want to trade your Nike NFT with someone's Reebok NFT, it would help to use an open standard with an economic mechanism for trade between counterparties built-in.
    - roywiggins 6y ago
      Nike can just produce a set of PUF keys, cryptographically sign that list, and publish it. Then they embed one of these into a bunch of otherwise identical Nike products. The message could also describe the product's physical attributes so someone couldn't swap a PUF between differently-rare Nike products. Knowing the PUF key doesn't let you fabricate a physical widget with the same key (that's the unclonable part). So they can all be public, and anyone can keep a copy of the batch of PUF keys that includes their object's PUF key. When they want to prove it's an authentic item, they can prove the PUF produces a key on that list and prove the list was signed by Nike by normal public key cryptography. In this scheme, Nike published their public key in an SEC filing, so in the worst case you can go ask the SEC for it. Nike could also stick a copy of their public key in every product and advertisement they make if you want to be paranoid about verifying this in 50 years. This seems more bombproof in some ways than relying on Ethereum to keep existing and well-governed.
- usehackernews 6y ago
  You can’t give 10 Fake Nikes the address of Nikes original wallet, that’s not how this works. You can’t just assign an NFT any address you want, this is all verified via smart contracts. The point of the block chain is that it’s immutable. Here’s Nikes patent for this: https://pdfpiw.uspto.gov/.piw?docid=10505726 https://pdfpiw.uspto.gov/.piw?docid=10505726
roywiggins 6y ago
And if someone intercepts the shoe in transit and replaces it with a counterfeit, how does the token notice? Nike could just publish a public key in an SEC filing and you could use that to verify that you're actually talking to the company. That would be exactly as good and much simpler.
- usehackernews 6y ago
  The token does not notice, and that’s exactly what we want. As the original buyer, the token is already stored in my wallet when I bought the shoes from Nike. Whoever stole the item can try to sell it, but given they don’t own the wallet that the token lives in - everyone will know it’s a stolen good. Another benefit of NFT for psychical goods. Here is Nikes patent for this use case: https://pdfpiw.uspto.gov/.piw?docid=10505726 https://pdfpiw.uspto.gov/.piw?docid=10505726
  - DC1350 6y ago
    I still don’t get it. Why can’t the owner of the NFT and real shoe just keep the real shoe and transfer a counterfeit shoe along with the token?
    - zaarn 6y ago
      Because then the real shoe is no longer associated with the NFT.
  - krrrh 6y ago
    Anyone who’s been involved with crypto for more than a month or tried to help people to sign their email with PGP knows how often people lose their keys even when access to fungible cryptocurrencies is on the line. So what happens to the shoes I want to sell if I lose my private key or it is stolen (probably more likely than someone stealing the physical shoes)? Do I simply lose the right to sell? Or do I go to jail for not being able to prove that I own them? What if the person I’m selling the shoes to believes me or doesn’t care? What is the real cost of stolen or fraudulent goods to the shoe market in percentage terms? Does it justify all of these extra transaction costs being layered on the honest shoe traders? Are there probably good reasons that the idiom, “possession is 9/10ths of the law” is so common?

randomopining 6y ago

How do you attach a digital address to a physical item? Let’s say I buy a Nike shoe and then give 10 fake Nike shoes the same digital address. They are amazing fakes. Same issue as today right? Unless there is a clever crossover to convert from digital verification to physical and back... seems worthless to me.

drcode 6y ago
Well, for any collectible item an important factor is "provenance", i.e. is there a legitimate reason to believe the item originated from a credible source. At least nfts now require people to also forge the provenance, which provides an additional hurdle to forgers (my best attempt to steelman the "pro nft" argument) For instance, if a great great grandson of Henry VII sells a medallion that he claims belonged to his ancestor, that would have more weight than a similar medallion from a random individual, because it's far less likely for a relative to also be a blatant forger. In theory at least, nfts provide a similar (limited) assurance.
- TheCapeGreek 6y ago
  The difference is provenance with NFTs is about the NFT itself, but not the item. Like mentioned elsewhere here, block # and timestamp will differ. But digital items don't have provenance. To put it another way: the analogue is not original medallion vs new fake one. They're both 100% identical medallions in every conceivable way, but the receipt for one is older than the other. I don't know about you but I don't give a damn if your receipt is older than mine if the items are not unique in any way.
roywiggins 6y ago
The only thing I can think of is embedding a physical unclonable function into the thing. As long as Nike holds on to custody of the physical tokens and only embeds them in real Nike products, then you could verify with the Nike database that it's a real token and a real product. But you don't need a blockchain for that. https://en.m.wikipedia.org/wiki/Physical_unclonable_function https://en.m.wikipedia.org/wiki/Physical_unclonable_function
- chrisco255 6y ago
  Sure you do. Nike could go out of business and their records lost forever. Nike could suffer a hack. Nike could have a rogue employee manipulate the database values. Nike could be thrown off the internet by AWS. A public blockchain like Ethereum is plausibly neutral, decentralized into tens of thousands of nodes worldwide who carry copies of the ledger, and there is a strong economic incentive baked into the blockchain to keep blocks consistent and persistent. And if you want to trade your Nike NFT with someone's Reebok NFT, it would help to use an open standard with an economic mechanism for trade between counterparties built-in.
  - roywiggins 6y ago
    Nike can just produce a set of PUF keys, cryptographically sign that list, and publish it. Then they embed one of these into a bunch of otherwise identical Nike products. The message could also describe the product's physical attributes so someone couldn't swap a PUF between differently-rare Nike products. Knowing the PUF key doesn't let you fabricate a physical widget with the same key (that's the unclonable part). So they can all be public, and anyone can keep a copy of the batch of PUF keys that includes their object's PUF key. When they want to prove it's an authentic item, they can prove the PUF produces a key on that list and prove the list was signed by Nike by normal public key cryptography. In this scheme, Nike published their public key in an SEC filing, so in the worst case you can go ask the SEC for it. Nike could also stick a copy of their public key in every product and advertisement they make if you want to be paranoid about verifying this in 50 years. This seems more bombproof in some ways than relying on Ethereum to keep existing and well-governed.
usehackernews 6y ago
You can’t give 10 Fake Nikes the address of Nikes original wallet, that’s not how this works. You can’t just assign an NFT any address you want, this is all verified via smart contracts. The point of the block chain is that it’s immutable. Here’s Nikes patent for this: https://pdfpiw.uspto.gov/.piw?docid=10505726 https://pdfpiw.uspto.gov/.piw?docid=10505726

roywiggins 6y ago

And if someone intercepts the shoe in transit and replaces it with a counterfeit, how does the token notice? Nike could just publish a public key in an SEC filing and you could use that to verify that you're actually talking to the company. That would be exactly as good and much simpler.

usehackernews 6y ago
The token does not notice, and that’s exactly what we want. As the original buyer, the token is already stored in my wallet when I bought the shoes from Nike. Whoever stole the item can try to sell it, but given they don’t own the wallet that the token lives in - everyone will know it’s a stolen good. Another benefit of NFT for psychical goods. Here is Nikes patent for this use case: https://pdfpiw.uspto.gov/.piw?docid=10505726 https://pdfpiw.uspto.gov/.piw?docid=10505726
- DC1350 6y ago
  I still don’t get it. Why can’t the owner of the NFT and real shoe just keep the real shoe and transfer a counterfeit shoe along with the token?
  - zaarn 6y ago
    Because then the real shoe is no longer associated with the NFT.
- krrrh 6y ago
  Anyone who’s been involved with crypto for more than a month or tried to help people to sign their email with PGP knows how often people lose their keys even when access to fungible cryptocurrencies is on the line. So what happens to the shoes I want to sell if I lose my private key or it is stolen (probably more likely than someone stealing the physical shoes)? Do I simply lose the right to sell? Or do I go to jail for not being able to prove that I own them? What if the person I’m selling the shoes to believes me or doesn’t care? What is the real cost of stolen or fraudulent goods to the shoe market in percentage terms? Does it justify all of these extra transaction costs being layered on the honest shoe traders? Are there probably good reasons that the idiom, “possession is 9/10ths of the law” is so common?