4 ms·

I could be missing something big but to me the principle of nft seems to be to find a greater fool who will buy it, and the crypto part helps sell it to the gre

I could be missing something big but to me the principle of nft seems to be to find a greater fool who will buy it, and the crypto part helps sell it to the greater fool. For an ownership right to be meaningful, it needs to have some legally recognized meaning by your centralized authority. If I have a peice of paper that says I own a house or a car or whatever, it’s only useful because I can show that in a court and the people with guns working for the state will give it to me instead of someone else with a fraudulent claim. And if you have that, then the distributed crypto part is redundant... It gets more complicated with art; especially like the jpeg that was just sold at an auction. What does it mean to own that digital image? What value/ rights does ownership give me? But, fundamentally the ownership being tabulated in a blockchain doesn’t do much a piece of official looking paper doesn’t do, except sound more exciting. I think of it is as notarizing a title to something, but in a new cool way associated with getting rich off Bitcoin.

gverrilla 6y ago
Provenance. There's a huge problem with fake art. It's not a matter of securing ownership with police/justice/government, but securing valid provenance. Anyhow I know very little about this and could be wrong.
- mattnewton 6y ago
  Doesn’t provenance need to be proven outside of the blockchain by some experts or something though? And then written down into the blockchain? It seems like the same problem with a different “authority”
  - chrisco255 6y ago
    But that only has to occur once with the blockchain. Once it is encoded, and recognized to be authentic, the record will remain. Transfers will be recorded perfectly in the ledger. With physical items, the provenance has to be determined independently every single exchange.
    - skissane 6y ago
      The physical item still has to be examined by experts on every exchange, if you want to avoid the risk that the legitimate owner of the real thing sells a fake and secretly keeps the real item for themselves. The blockchain can't stop that.
      - chrisco255 6y ago
        NFTs are generally being used for digital art at this time. Physical art of course still has this requirement.
        lottin 6y ago
        But authenticity is only a concern in physical art.
        chrisco255 6y ago
        No, it's not. It's even more of a concern in digital art because until blockchains came around, it was virtually free to make a perfect digital copy of something.
        skissane 6y ago
        What does it mean to own a digital artwork? To own the copyright in it? Blockchain doesn't really do much here because ownership of copyrights is determined by the legal system not by a blockchain. (And normally when an artist sells an artwork they keep the copyright themselves; you only get the copyright too if you specifically negotiate with the artist for that, or if you commission the art as a "work-for-hire".) To own the only digital copy of it? Blockchain does nothing to stop people making more digital copies of it. Blockchain is not a DRM system. It seems like "owning" digital art where one doesn't have the copyright or exclusive possession of digital copies is basically a meaningless form of ownership. It is the status of "ownership" stripped of all substantive content.
ffggvv 6y ago
you may be right but these people are getting rich while we can only take satisfaction in knowing it may eventually crash
- mattnewton 6y ago
  Absolutely, and lots more will be rich still. Find-the-greater-fool is often a very profitable game for everyone but the greatest fool, and I certainly didn’t mean to say no one should gamble on these, or even that we should run out of “fools” anytime soon. It’s not like people who own bars of precious metals are betting that suddenly we will have a huge demand for gold and silver electronics after all, most are looking for something to offload to other people who want something easy to offload later still.
- CarelessExpert 6y ago
  By that logic you should buy into every Ponzi scheme and speculative bubble you can find.
luka-birsa 6y ago
What if we're a bit more creative and look at any of the number of trading card games (TCGs, such as Magic the Gathering). One of the key issues of the TCGs is that in their digital form, trading of items is up to the whims of the game author. Providing a standardized NFT allows the players to trade in game items, just as you can trade physical cards today. Just because you don't see the implications today (I agree, buying GIFs for 7M USDs is crazy) that doesn't meant that NFTs aren't a very interesting development.
- DivisionSol 6y ago
  Why would a developer implement this? What incentives do they have, other than being able to say they did? Digital cards being locked to an account was the greatest achievement for TCGs in the past decade. Non-tradability is a feature. This applies to every single form of game-based NFT. What incentive does a Game Developer have in implementing their items on the blockchain? So I can trade my WoW Health Potions for FFXIV Health Potions? In a kind world, when I'm tired of WoW I could safely transfer my wealth from WoW to FFXIV, but does Blizzard want that? Better to ensure lock-in. Further there will never be the case where a game like WoW would recognize an item from FFXIV as canonical and equal value. I wouldn't be able to buy a FFXIV health potion and use it in WoW. The only games that will implement NFT items will do it as a gimmick. TCG, or normal game, or anything. I have yet to see an actual compelling use case that solves a problem that game developers have. Remember, solving a problem a player has doesn't mean the incentives for game developers are aligned.
  - chrisco255 6y ago
    Simple, there exists an open marketplace and game theory suggests that some game developer will figure out that aligning the player's interests with their own will result in a profitable niche for themselves. You may not necessarily be able to use FFXIV health potion in WoW, but could you imagine that an up and coming 3rd party dev gave you a discount because you had a FFXIV NFT? Could you conceive of a group of indie publishers banning together to create a collaborative ecosystem of NFTs that all their games share and recognize? Could you imagine achievements in certain games unlocking secret levels in others?
chrisco255 6y ago
Ownership and chain of title pre-dates many of the centralized governments that even exist today. For example, who was the monarch of Italy when Da Vinci painted the Mona Lisa? How many times has the government changed hands since it was painted? How many times has the painting changed hands? How do you determine the Mona Lisa's authenticity? Many heirlooms go back centuries and pass down through generations even as those generations move jurisdictions. The Nyan cat gif NFT was composed by the original meme creator. That gives it value. What does it mean for a baseball to be autographed with Babe Ruth's signature? If it's authentic, it means a great deal. There's no court of law that is going to validate if a Babe Ruth baseball is authentic or not and whether that fact gives it value or not. That is going to be up to the market of appraisers. The crypto part gives you a perfect chain of custody. I'm giving you a digital item, that is provably rare and verifiably linked to the original creator of the artwork.
- lottin 6y ago
  Except the concept of authenticity doesn't really apply to digital information. There exist infinitely many copies of any piece of digital art and none of them is more authentic than the others. They are all equally authentic.
  - chrisco255 6y ago
    No. The whole point of blockchain and crypto is digital scarcity. Bitcoin has been proving this concept since 2009. Why is a BCH coin cheaper than a BTC coin? Why is a Doge coin cheaper than either? The supply & demand of each is completely different. NFTs are not infinite. They are provably scarce. They not only cost money to mint, but any artist who cheapens their NFTs by distributing too many copies will see the effects in the price and valuation of their art.
    - lottin 6y ago
      Of course, but a work of digital art, which is what we are talking about, is not scarce. There are infinitely many exact copies of it and each copy costs nothing to produce. Anyone pretending that one of the copies is more authentic than the others are kidding themselves.
atmosx 6y ago
Not really. There is value in exclusivity and/or being the first owner. You can get a perfect copy of the Mona Lisa at your house. You either print a high definition picture or have someone paint an exact copy. Will anyone confuse the one in Paris with yours? Will the Mona Lisa in Louvre lose value? Regarding the authority.. you don’t need men with guns. You just need to prove that yours is the original. The registration date is a strong indicator.
- taurath 6y ago
  Interestingly, many things up for sale as an NFT are not only not tied to an original, they’re often not offered by anyone who owns it. So in that case, the “original” ends up basically being “whoever made it an NFT first”.
  - atmosx 6y ago
    I don’t see how this problem is relevant. Same thing happens in the physical world with papers, paintings, licenses, etc. Who invented the calculus? Newton or Leibniz?

gverrilla 6y ago

Provenance. There's a huge problem with fake art. It's not a matter of securing ownership with police/justice/government, but securing valid provenance. Anyhow I know very little about this and could be wrong.

mattnewton 6y ago
Doesn’t provenance need to be proven outside of the blockchain by some experts or something though? And then written down into the blockchain? It seems like the same problem with a different “authority”
- chrisco255 6y ago
  But that only has to occur once with the blockchain. Once it is encoded, and recognized to be authentic, the record will remain. Transfers will be recorded perfectly in the ledger. With physical items, the provenance has to be determined independently every single exchange.
  - skissane 6y ago
    The physical item still has to be examined by experts on every exchange, if you want to avoid the risk that the legitimate owner of the real thing sells a fake and secretly keeps the real item for themselves. The blockchain can't stop that.
    - chrisco255 6y ago
      NFTs are generally being used for digital art at this time. Physical art of course still has this requirement.
      - lottin 6y ago
        But authenticity is only a concern in physical art.
        chrisco255 6y ago
        No, it's not. It's even more of a concern in digital art because until blockchains came around, it was virtually free to make a perfect digital copy of something.
        skissane 6y ago
        What does it mean to own a digital artwork? To own the copyright in it? Blockchain doesn't really do much here because ownership of copyrights is determined by the legal system not by a blockchain. (And normally when an artist sells an artwork they keep the copyright themselves; you only get the copyright too if you specifically negotiate with the artist for that, or if you commission the art as a "work-for-hire".) To own the only digital copy of it? Blockchain does nothing to stop people making more digital copies of it. Blockchain is not a DRM system. It seems like "owning" digital art where one doesn't have the copyright or exclusive possession of digital copies is basically a meaningless form of ownership. It is the status of "ownership" stripped of all substantive content.

ffggvv 6y ago

you may be right but these people are getting rich while we can only take satisfaction in knowing it may eventually crash

mattnewton 6y ago
Absolutely, and lots more will be rich still. Find-the-greater-fool is often a very profitable game for everyone but the greatest fool, and I certainly didn’t mean to say no one should gamble on these, or even that we should run out of “fools” anytime soon. It’s not like people who own bars of precious metals are betting that suddenly we will have a huge demand for gold and silver electronics after all, most are looking for something to offload to other people who want something easy to offload later still.
CarelessExpert 6y ago
By that logic you should buy into every Ponzi scheme and speculative bubble you can find.

luka-birsa 6y ago

What if we're a bit more creative and look at any of the number of trading card games (TCGs, such as Magic the Gathering). One of the key issues of the TCGs is that in their digital form, trading of items is up to the whims of the game author. Providing a standardized NFT allows the players to trade in game items, just as you can trade physical cards today. Just because you don't see the implications today (I agree, buying GIFs for 7M USDs is crazy) that doesn't meant that NFTs aren't a very interesting development.

DivisionSol 6y ago
Why would a developer implement this? What incentives do they have, other than being able to say they did? Digital cards being locked to an account was the greatest achievement for TCGs in the past decade. Non-tradability is a feature. This applies to every single form of game-based NFT. What incentive does a Game Developer have in implementing their items on the blockchain? So I can trade my WoW Health Potions for FFXIV Health Potions? In a kind world, when I'm tired of WoW I could safely transfer my wealth from WoW to FFXIV, but does Blizzard want that? Better to ensure lock-in. Further there will never be the case where a game like WoW would recognize an item from FFXIV as canonical and equal value. I wouldn't be able to buy a FFXIV health potion and use it in WoW. The only games that will implement NFT items will do it as a gimmick. TCG, or normal game, or anything. I have yet to see an actual compelling use case that solves a problem that game developers have. Remember, solving a problem a player has doesn't mean the incentives for game developers are aligned.
- chrisco255 6y ago
  Simple, there exists an open marketplace and game theory suggests that some game developer will figure out that aligning the player's interests with their own will result in a profitable niche for themselves. You may not necessarily be able to use FFXIV health potion in WoW, but could you imagine that an up and coming 3rd party dev gave you a discount because you had a FFXIV NFT? Could you conceive of a group of indie publishers banning together to create a collaborative ecosystem of NFTs that all their games share and recognize? Could you imagine achievements in certain games unlocking secret levels in others?

chrisco255 6y ago

Ownership and chain of title pre-dates many of the centralized governments that even exist today. For example, who was the monarch of Italy when Da Vinci painted the Mona Lisa? How many times has the government changed hands since it was painted? How many times has the painting changed hands? How do you determine the Mona Lisa's authenticity? Many heirlooms go back centuries and pass down through generations even as those generations move jurisdictions. The Nyan cat gif NFT was composed by the original meme creator. That gives it value. What does it mean for a baseball to be autographed with Babe Ruth's signature? If it's authentic, it means a great deal. There's no court of law that is going to validate if a Babe Ruth baseball is authentic or not and whether that fact gives it value or not. That is going to be up to the market of appraisers. The crypto part gives you a perfect chain of custody. I'm giving you a digital item, that is provably rare and verifiably linked to the original creator of the artwork.

lottin 6y ago
Except the concept of authenticity doesn't really apply to digital information. There exist infinitely many copies of any piece of digital art and none of them is more authentic than the others. They are all equally authentic.
- chrisco255 6y ago
  No. The whole point of blockchain and crypto is digital scarcity. Bitcoin has been proving this concept since 2009. Why is a BCH coin cheaper than a BTC coin? Why is a Doge coin cheaper than either? The supply & demand of each is completely different. NFTs are not infinite. They are provably scarce. They not only cost money to mint, but any artist who cheapens their NFTs by distributing too many copies will see the effects in the price and valuation of their art.
  - lottin 6y ago
    Of course, but a work of digital art, which is what we are talking about, is not scarce. There are infinitely many exact copies of it and each copy costs nothing to produce. Anyone pretending that one of the copies is more authentic than the others are kidding themselves.

atmosx 6y ago

Not really. There is value in exclusivity and/or being the first owner. You can get a perfect copy of the Mona Lisa at your house. You either print a high definition picture or have someone paint an exact copy. Will anyone confuse the one in Paris with yours? Will the Mona Lisa in Louvre lose value? Regarding the authority.. you don’t need men with guns. You just need to prove that yours is the original. The registration date is a strong indicator.

taurath 6y ago
Interestingly, many things up for sale as an NFT are not only not tied to an original, they’re often not offered by anyone who owns it. So in that case, the “original” ends up basically being “whoever made it an NFT first”.
- atmosx 6y ago
  I don’t see how this problem is relevant. Same thing happens in the physical world with papers, paintings, licenses, etc. Who invented the calculus? Newton or Leibniz?