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I don't mean to distract from the main conversation, but I want to talk about how insidiously evil it is that NFTs can be coded to send the original creator a p

I don't mean to distract from the main conversation, but I want to talk about how insidiously evil it is that NFTs can be coded to send the original creator a percentage $ cut off of every subsequent transaction for all time. If that's not hard coding wealth inequality and a new class of asset owners, I don't know what is. This is disturbing, along with the whole thing itself anyway. Imagine if cryptocurrency started doing that?

ketamine__ 5y ago
I thought this comment was a joke at first. What's wrong with creators getting royalties? Is there proof that artists are too wealthy (in general)?
- geofft 5y ago
  Two things. First, in the real world, creators stop getting royalties after the item expires and goes into the public domain, and there's a pretty strong view that the time for that is already too long and the beneficiaries of that long period tend to be companies instead of creators. I would say that there is in fact a widespread belief that the heirs of Walt Disney are too wealthy, despite the fact that Walt himself was a creator. Second, there's no reason to believe this won't lead to the exact sort of mechanisms that plague existing royalties - e.g., a young singer makes a (smart) contract with a recording studio to have the studio count as the "creator" of the work as far as the contract cares, and the singer is just performing work for hire, in exchange for marketing, promotion, initial funding, and connections. A singer who has absolutely no resources but their talent is probably going to say yes to that, because it's better for them in the short term than going it alone, and the odds are against them (not every talented young singer can become famous). But the profits continue to flow to the recording studio for all time.
  - jcranmer 5y ago
    There's another thing you're missing: First Sale Doctrine. In the world of physical goods, once you've sold a copy of something, you have no rights whatsoever to constrain what people can do with that copy. Authors don't see a dime for used book sales, for example.
    - twox2 5y ago
      But the IRS still gets a perpetual royalty on every subsequent sale. Why can't the producer?
      - deleted 5y ago
        [deleted]
      - geofft 5y ago
        Because "the IRS" (not sure which jurisdiction you're in, but here in the US, it's actually the local and state government) is an entity controlled by elections that is obligated to spend its budget in ways decided on by elections, and therefore can reasonably exist forever. The royalties are not for the benefit of the IRS. A state or local government is sort of like an offline DAO, if you're familiar with DAOs. A producer does not live forever, and the producer's heirs get to spend things as they see fit. Also, in many cases, the local government does not get a royalty on every sale - certain sales, such as to non-profits, do not get taxed.
        twox2 5y ago
        I'm not talking about literal royalties. If I have an item that I buy new (or used) and it's not a depreciating asset, and I sell it, then I owe income tax or capital gains, don't I? And then when the new owner sells it a few months or years later as is common in the case of collectibles, they have to pay income tax or gains on their sale as well, and this continues for the entire life span of the object.
        geofft 5y ago
        Oh, I assumed you were talking about sales taxes, which is the most obvious case of a DAO-like organization taking money on every sale, as a percentage of the selling price. Income taxes and capital gains taxes are on your profit, not on the sale itself, so they're less analogous. If you as a taxable entity don't net make any money, you don't owe any income taxes (more or less); if you as a taxable entity don't make any profit on an asset you bought some time ago, you don't owe any capital gains taxes (more or less). So both of those are much more reasonable than a royalty on every sale - they don't follow the asset around forever, and you only have to pay a percentage of the money you made if you're in fact making money. It seems like, if I buy an NFT at $10000 and then sell it a month later for $9000, some of that $9000 goes to the creator of the NFT and not to me.
RobertDeNiro 5y ago
Not surprisingly, that's the part that sold Mark Cuban on NFTs. The infinite money stream.
chrischattin 5y ago
Artist sells painting for $1k. Buyer then sells painting for $1M. Next buyer sells for $10M. Original artist only made $1k on a $10M painting. Shouldn't the original artist be able to participate in the upside of their creation? I'm not seeing the "evil" here. Just a way for creators to cut out the middle men. Or, just a different way of structuring a contract. There's a lot of moralistic FUD against crypto on HN right now. Feels very much like a coordinated propaganda campaign.
- cdelsolar 5y ago
  yes, agree with the FUD comment, please stop, you're making my crypto drop
- hervature 5y ago
  Do you feel the same way with collectible cars? Every time a 69 Thunderbird is sold, Ford should get a cut in the upside? How do you feel about the inverse? If a painting goes down in value, is the artist on the hook for the downside of their creation? The answer is no, the creator handed over the creation on sale. Anything else would need to be hashed out in a contract which would drastically reduce sale price.
  - chrischattin 5y ago
    I don't have feelings about it either way. I think you're reading way too much into my comment. It's just a new interesting way to structure a contract. Neither good nor evil. I certainly don't think it's "evil" like the comment I replied.
    - hervature 5y ago
      Yes, I did forget the OP. I don't understand how people getting paid is evil either. Whether that comes in a huge lump sum at the beginning or in interest overtime, it doesn't really matter. There is going to be a cash flow analysis that will tell you how much one version of the contract is worth relative to the other. My comment was more that these contracts aren't new, they just aren't particularly useful because it is hard to think of a contract in perpetuity.
esoltys 5y ago
When I think of "percentage $ cut off of every subsequent transaction" I think of Artist's Resale Right, or "Droit de suite" https://en.wikipedia.org/wiki/Droit_de_suite https://en.wikipedia.org/wiki/Droit_de_suite
vb6sp6 5y ago
do you feel the same way about royalties?
deleted 5y ago
[deleted]
dschnurr 5y ago
The people receiving royalties are the artists in these cases – instead of the record companies, instagrams, and etsys of the world. I fail to see how this won't be a net positive for wealth equality when we're shifting the advantage to those who have historically been taken advantage of.
- AlexandrB 5y ago
  This is not a property of NFTs, but rather of new, unproven technologies. If NFTs "make it big", there will be plenty of middlemen that spring up to "help" artists sell NFTs while owning the IP rights and collecting royalties.
  - dschnurr 5y ago
    Sure there will be middlemen trying to profit due to asymmetry of information / technical knowledge. But as technology marches along the barriers to entry of launching new things trends to zero. Smart creators are increasingly harnessing new technologies to cut out existing middlemen. Podcasts are a great example of this, anyone with a microphone can start an entertainment business now and collect money from direct relationships with advertisers.
    - jjulius 5y ago
      >Podcasts are a great example of this... And yet plenty of middlemen exist for podcasts, too - Earwolf, Stitcher, yadda yadda. Sure, barriers to entry trend toward zero, but that doesn't mean everyone's going to see what you're selling. Many people will need to partner with someone who can help get their shit in front of people who want it, and those partners are going to want a cut. Record labels, Instagrams and Etsys will show up to the NFT party in spades.
    - AlexandrB 5y ago
      I think the big news in Podcasts is centralization. Many new podcasts get their money either from "networks" or by being part of one of the podcast walled gardens (e.g. Spotify). I suspect traditional podcasts will go the way of blogs soon and be largely superseded by several competing commercial platforms (think Medium). See, for example, the moves by Apple to turn their Podcasts app into a subscription platform: https://www.apple.com/newsroom/2021/04/apple-leads-the-next-chapter-of-podcasting-with-apple-podcasts-subscriptions/ https://www.apple.com/newsroom/2021/04/apple-leads-the-next-...
thebean11 5y ago
This is about as easy to enforce on the blockchain as it is in meatspace... All you have to do is "wrap" the NFT in a smart contract, then move the smart contract around. The NFT itself is not moving (its owner is the smart contract) so it won't trigger the fee.
- dschnurr 5y ago
  Some artists choose to attach "perks" to their NFTs – i.e. meet and greets, access to private communities. They could choose not to honor these perks for NFTs held by contracts. They could even choose to re-mint the work if the new owner is doing nefarious things with the old one (though many would see this as a dubious action)
  - scatters 5y ago
    Eh, so write a warrant to buy the NFT for a dollar, then sell the warrant.
    - thebean11 5y ago
      I think that would be difficult to do trustlessly though, without a smart contract holding the NFT. How can I force you to send me the NFT if I exercise?
- newsclues 5y ago
  Can you embed a smart contract in an NFT so that if you wrap or otherwise sell outside of the initial chain, it’s null and void and the rights revert back to the creator to auction again?
  - thebean11 5y ago
    Good question, I'm not sure if you can programmatically check if an address belongs to a smart contract but it wouldn't be surprising if you could, and prevent transferring ownerships to those addresses.
ww520 5y ago
Isn't that what copyright is about?
- toss1 5y ago
  Not quite. Copyright prevents Bob from misappropriating Alice's work. E.g., Bob purchases a painting from Alice for $100. Bob can not legally now use that painting as a source to make and resell copies. But Bob can sell the original painting to Charlie for $200 and pocket the entire $200 from Charlie. Alice has nothing to do with that sale, and does not profit from any subsequent sale. But if Alice sold Bob and NFT instead, when Bob sold it to Charlie, perhaps $180 of Charlie's money would go to Bob and $20 would also go to Alice. And this would hold true for every future sale, so when Alice died and became a famous dead artist and her works sell for $200K, her estate gets $20K, etc. To me, this is the sole redeeming value of NFTs, but only if artists can actually keep those rights and revenue streams. The usual path of such things is that middlemen insert themselves to engage in their usual rent-seeking behaviors.
  - platz 5y ago
    NFTs don't liscence or provide rights to artworks; they are useless to artists.
  - ww520 5y ago
    RIAA collects a loyalty every time a song is played just because they hold the copyright. Why isn’t there moral outrage on that?
bondarchuk 5y ago
You can just wrap the NFT inside a holding contract, then trade access to the holding contract without triggering an actual sale. At least on ethereum you can do this.
swinglock 5y ago
> Imagine if cryptocurrency started doing that? It happened, that's SafeMoon. Sounds like a Ponzi scheme? That's their selling point!
bitcurious 5y ago
>Imagine if cryptocurrency started doing that? Isn't this essentially what proof of steak is? A tax on all transactions proportional to how much you already own, but disproportionately applied to smaller users. That last bit is key. Speaking of Ethereum for a second - the largest asset owners will be institutions which can transact off-chain, which means that fees are being payed more often by folks that don't have that kind of scale.
- wearywanderer 5y ago
  I've always felt that the best way to prove steaks is with forks.
  - ASalazarMX 5y ago
    It's a shame that ecoins with proof-of-steak can't be ecofriendly. Maybe that's for the best, since you could accidentally eat your steaks and lose your money.
    - baryphonic 5y ago
      You referring to proof-of-steak directly releasing greenhouse gases in the form of bovine farts?
  - bitcurious 5y ago
    Quick, invest in Beyond Meat! It’s the future of blockchain.
- smrq 5y ago
  First we had proof of work, and it consumed all the world's processing power. Then we had proof of space, and it consumed all the world's data storage. Then we had proof of steak, and it consumed all the world's food. Thus ended humanity.
  - visualradio 5y ago
    First we had gold, and the Spanish looted the New World to acquire it and found themselves no richer. Then we had real estate mortgages and used deeds to estates instead of gold, and the speculators wrote up intangible asset prices as high as possible to get more money from central banks. Then we had digital gold, and no one used it because money is credit and no one wanted to pay excessive interest to internet goldbugs. Ideally we would recognize that issuing money is a collective problem and attempt to fix our public money system, which is based on real estate mortgages. We can fix it by recognizing that when a home has a fixed capital replacement cost of $150,000 and broker has written the comparable sales price up to $400,000 that it is not necessary to publicly guarantee the mortgages at the comparable sales price of $400,000 only the $150,000. Or to at least cap the public mortgage guarantees at double the replacement cost ($300,000) whenever the comparable sales price ($400,000) is greater. It perhaps goes against libertarian sensibilities to claim that if the labor and material cost of the replacing all of the structures, fixtures, equipment, appliances conveyed with an estate is $150,000 and the comparable sales prices of $400,000 that the estate has 'intrinsic value' of $150,000 rather than just subjective value of $400,000. But with federally backed mortgages the $400,000 is not a long run competitive market value, it is a number which a specific set of brokers and banks have fixed upon which the central bank then commits to backing regardless of how they pick it. Requiring loans which expand legal tender to be issued on at least half security of the replacement cost of non-obsolete fixed capital would be a reasonable short term reform to stabilize the public money system in case private crypto money doesn't work out.
geofft 5y ago
Moreover, how is this not just a form of DRM?
- a1369209993 5y ago
  You can still copy the underlying data however you like - if the NFT says http://example.com/foobar.jpg http://example.com/foobar.jpg you can just do `wget http://example.com/foobar.jpg http://example.com/foobar.jpg`, regardless of whether you've even seen the NFT, and assuming you can access foobar.jpg at all, you can then copy it however you like.
draw_down 5y ago
Some people don’t appreciate the existence of kulaks, it is true.
twox2 5y ago
Behind the scenes the NFT is just a smart contract standard. The royalty isn't really baked into the contract itself, but the platform that's using to exchange it.... So lots of projects with this perpetual royalty might get moved to another platform like opensea or rarible, and the royalty goes poof. Also, the royalty is just artists getting commission on their work. Most NFT minting platforms worth anything allow the artist to mint from their wallet.
bsedlm 5y ago
just sounds like automated royalties to me (with infinite copyright). AT least when an NFT does this, it is known in advance; as opposed to legistative action changing the goal posts during the match. Also, I suppose there can be a way to cancel the royalties by making a meta-NFT (of sorts) that "owns" the NFT which stays in one place forever so that the meta-NFT can be traded instead.
Pils 5y ago
I believe this is wrong. Creator percentage isn't coded into the Ethereum-based NFT's themselves, it's done at the marketplace level. Currently, if you bought an NFT on Foundation and sold it on Opensea, there isn't a way to encode directly into the NFT a guarantee Foundation's royalty agreement would be followed. EIP-2981 is the draft protocol-level NFT royalty implementation, but you will note that it's opt-in and NFT marketplaces do not need to respect it (although theoretically they could be blacklisted/sued). It explicitly outlines why a non opt-in implementation wouldn't work: > It is impossible to know which NFT transfers are the result of sales, and which are merely wallets moving or consolidating their NFTs. Therefore, we cannot force every transferFrom() call to involve a royalty payment, as not every transfer is a sale that would require such payment. We believe the NFT marketplace ecosystem will voluntarily implement this royalty payment standard to provide ongoing funding for artists and other creators, and NFT buyers will assess the royalty payment as a factor when making NFT purchasing decisions. [0] The only non opt-in royalty percentage implementation I know of is Euler Beats, but that royalty percentage only applies to printing new NFTs through their bonding curve. If you bought an Euler Beat print through a third party, you could simply use the safeTransferFrom function and avoid royalties entirely. As someone pointed out in this thread, this arrangement is very common for high end art already, since it helps keep incentives aligned between collectors and the artists. [0] https://eips.ethereum.org/EIPS/eip-2981#universal-royalty-payments https://eips.ethereum.org/EIPS/eip-2981#universal-royalty-pa...
- seibelj 5y ago
  I am an author of this EIP. You are correct. It is impossible to enforce unless the chain itself has NFT trading as part of a core feature. Otherwise it’s the honor system. But IMO this will be quite successful given the social pressure.
- smegger001 5y ago
  pardon my ignorance but how exactly does it force royalties to transfer? couldn't a owner just transfer the underlying etherum coin that is used for the NFT to another wallet address just like any other ethereum coin? and likewise exchange it in a new smart contract?
nathias 5y ago
compare it to what actually exists in the mainstream not some dark fears of possible dystopias ...
dumbfounder 5y ago
I have never heard this take before, you actually think it's evil? Insidiously so? I honestly can't even conceive of what your argument is. First off, the facts are a bit off, NFTs cannot currently contain hardcoded royalties (or whatever you call it). Right now it is voluntarily paid by the marketplaces that sell NFTs. But I think at some point it will evolve to be guaranteed. Sort of. But either way, if it's all transparent, then why is it evil? Maybe it acts as a deterrent of sales in the future, but I like that it can be controlled by the creator. It's everyone else's choice on whether to buy it, or whether that constitutes ownership. If you don't like it, don't buy it. Evil? Really? I don't get it at all. Not one single iota. But, willing to hear your argument for that. "Hardcoding wealth inequality" is hardly an argument. It's not like there are a ton of people creating a new superclass of rich artists. There are a few, but that isn't the way it will shake out long term. At least, any more than traditional art. Is all wealth inherently evil to you? Maybe that's your argument? I guess that's it? On your "imagine if cryptocurrency started doing that", I am sure there are cases where this happens. ZCash is one where 10% of mined blocks go back to the original investors and founding team. Not sure how I feel about that, I do think it's high, but I certainly don't think it's evil. If people don't like it, they won't use it, and something will take its place. No biggie.
sneak 5y ago
> but I want to talk about how insidiously evil it is that NFTs can be coded to send the original creator a percentage $ cut off of every subsequent transaction for all time This is not accurate.
skilesare 5y ago
They've already been designed. You just have to go all the way with it to create something interesting Http://catallax.info

ketamine__ 5y ago

I thought this comment was a joke at first. What's wrong with creators getting royalties? Is there proof that artists are too wealthy (in general)?

geofft 5y ago
Two things. First, in the real world, creators stop getting royalties after the item expires and goes into the public domain, and there's a pretty strong view that the time for that is already too long and the beneficiaries of that long period tend to be companies instead of creators. I would say that there is in fact a widespread belief that the heirs of Walt Disney are too wealthy, despite the fact that Walt himself was a creator. Second, there's no reason to believe this won't lead to the exact sort of mechanisms that plague existing royalties - e.g., a young singer makes a (smart) contract with a recording studio to have the studio count as the "creator" of the work as far as the contract cares, and the singer is just performing work for hire, in exchange for marketing, promotion, initial funding, and connections. A singer who has absolutely no resources but their talent is probably going to say yes to that, because it's better for them in the short term than going it alone, and the odds are against them (not every talented young singer can become famous). But the profits continue to flow to the recording studio for all time.
- jcranmer 5y ago
  There's another thing you're missing: First Sale Doctrine. In the world of physical goods, once you've sold a copy of something, you have no rights whatsoever to constrain what people can do with that copy. Authors don't see a dime for used book sales, for example.
  - twox2 5y ago
    But the IRS still gets a perpetual royalty on every subsequent sale. Why can't the producer?
    - deleted 5y ago
      [deleted]
    - geofft 5y ago
      Because "the IRS" (not sure which jurisdiction you're in, but here in the US, it's actually the local and state government) is an entity controlled by elections that is obligated to spend its budget in ways decided on by elections, and therefore can reasonably exist forever. The royalties are not for the benefit of the IRS. A state or local government is sort of like an offline DAO, if you're familiar with DAOs. A producer does not live forever, and the producer's heirs get to spend things as they see fit. Also, in many cases, the local government does not get a royalty on every sale - certain sales, such as to non-profits, do not get taxed.
      - twox2 5y ago
        I'm not talking about literal royalties. If I have an item that I buy new (or used) and it's not a depreciating asset, and I sell it, then I owe income tax or capital gains, don't I? And then when the new owner sells it a few months or years later as is common in the case of collectibles, they have to pay income tax or gains on their sale as well, and this continues for the entire life span of the object.
        geofft 5y ago
        Oh, I assumed you were talking about sales taxes, which is the most obvious case of a DAO-like organization taking money on every sale, as a percentage of the selling price. Income taxes and capital gains taxes are on your profit, not on the sale itself, so they're less analogous. If you as a taxable entity don't net make any money, you don't owe any income taxes (more or less); if you as a taxable entity don't make any profit on an asset you bought some time ago, you don't owe any capital gains taxes (more or less). So both of those are much more reasonable than a royalty on every sale - they don't follow the asset around forever, and you only have to pay a percentage of the money you made if you're in fact making money. It seems like, if I buy an NFT at $10000 and then sell it a month later for $9000, some of that $9000 goes to the creator of the NFT and not to me.

RobertDeNiro 5y ago

Not surprisingly, that's the part that sold Mark Cuban on NFTs. The infinite money stream.

chrischattin 5y ago

Artist sells painting for $1k. Buyer then sells painting for $1M. Next buyer sells for $10M. Original artist only made $1k on a $10M painting. Shouldn't the original artist be able to participate in the upside of their creation? I'm not seeing the "evil" here. Just a way for creators to cut out the middle men. Or, just a different way of structuring a contract. There's a lot of moralistic FUD against crypto on HN right now. Feels very much like a coordinated propaganda campaign.

cdelsolar 5y ago
yes, agree with the FUD comment, please stop, you're making my crypto drop
hervature 5y ago
Do you feel the same way with collectible cars? Every time a 69 Thunderbird is sold, Ford should get a cut in the upside? How do you feel about the inverse? If a painting goes down in value, is the artist on the hook for the downside of their creation? The answer is no, the creator handed over the creation on sale. Anything else would need to be hashed out in a contract which would drastically reduce sale price.
- chrischattin 5y ago
  I don't have feelings about it either way. I think you're reading way too much into my comment. It's just a new interesting way to structure a contract. Neither good nor evil. I certainly don't think it's "evil" like the comment I replied.
  - hervature 5y ago
    Yes, I did forget the OP. I don't understand how people getting paid is evil either. Whether that comes in a huge lump sum at the beginning or in interest overtime, it doesn't really matter. There is going to be a cash flow analysis that will tell you how much one version of the contract is worth relative to the other. My comment was more that these contracts aren't new, they just aren't particularly useful because it is hard to think of a contract in perpetuity.

esoltys 5y ago

When I think of "percentage $ cut off of every subsequent transaction" I think of Artist's Resale Right, or "Droit de suite" https://en.wikipedia.org/wiki/Droit_de_suite https://en.wikipedia.org/wiki/Droit_de_suite

vb6sp6 5y ago

do you feel the same way about royalties?

deleted 5y ago

[deleted]

dschnurr 5y ago

The people receiving royalties are the artists in these cases – instead of the record companies, instagrams, and etsys of the world. I fail to see how this won't be a net positive for wealth equality when we're shifting the advantage to those who have historically been taken advantage of.

AlexandrB 5y ago
This is not a property of NFTs, but rather of new, unproven technologies. If NFTs "make it big", there will be plenty of middlemen that spring up to "help" artists sell NFTs while owning the IP rights and collecting royalties.
- dschnurr 5y ago
  Sure there will be middlemen trying to profit due to asymmetry of information / technical knowledge. But as technology marches along the barriers to entry of launching new things trends to zero. Smart creators are increasingly harnessing new technologies to cut out existing middlemen. Podcasts are a great example of this, anyone with a microphone can start an entertainment business now and collect money from direct relationships with advertisers.
  - jjulius 5y ago
    >Podcasts are a great example of this... And yet plenty of middlemen exist for podcasts, too - Earwolf, Stitcher, yadda yadda. Sure, barriers to entry trend toward zero, but that doesn't mean everyone's going to see what you're selling. Many people will need to partner with someone who can help get their shit in front of people who want it, and those partners are going to want a cut. Record labels, Instagrams and Etsys will show up to the NFT party in spades.
  - AlexandrB 5y ago
    I think the big news in Podcasts is centralization. Many new podcasts get their money either from "networks" or by being part of one of the podcast walled gardens (e.g. Spotify). I suspect traditional podcasts will go the way of blogs soon and be largely superseded by several competing commercial platforms (think Medium). See, for example, the moves by Apple to turn their Podcasts app into a subscription platform: https://www.apple.com/newsroom/2021/04/apple-leads-the-next-chapter-of-podcasting-with-apple-podcasts-subscriptions/ https://www.apple.com/newsroom/2021/04/apple-leads-the-next-...

thebean11 5y ago

This is about as easy to enforce on the blockchain as it is in meatspace... All you have to do is "wrap" the NFT in a smart contract, then move the smart contract around. The NFT itself is not moving (its owner is the smart contract) so it won't trigger the fee.

dschnurr 5y ago
Some artists choose to attach "perks" to their NFTs – i.e. meet and greets, access to private communities. They could choose not to honor these perks for NFTs held by contracts. They could even choose to re-mint the work if the new owner is doing nefarious things with the old one (though many would see this as a dubious action)
- scatters 5y ago
  Eh, so write a warrant to buy the NFT for a dollar, then sell the warrant.
  - thebean11 5y ago
    I think that would be difficult to do trustlessly though, without a smart contract holding the NFT. How can I force you to send me the NFT if I exercise?
newsclues 5y ago
Can you embed a smart contract in an NFT so that if you wrap or otherwise sell outside of the initial chain, it’s null and void and the rights revert back to the creator to auction again?
- thebean11 5y ago
  Good question, I'm not sure if you can programmatically check if an address belongs to a smart contract but it wouldn't be surprising if you could, and prevent transferring ownerships to those addresses.

ww520 5y ago

Isn't that what copyright is about?

toss1 5y ago
Not quite. Copyright prevents Bob from misappropriating Alice's work. E.g., Bob purchases a painting from Alice for $100. Bob can not legally now use that painting as a source to make and resell copies. But Bob can sell the original painting to Charlie for $200 and pocket the entire $200 from Charlie. Alice has nothing to do with that sale, and does not profit from any subsequent sale. But if Alice sold Bob and NFT instead, when Bob sold it to Charlie, perhaps $180 of Charlie's money would go to Bob and $20 would also go to Alice. And this would hold true for every future sale, so when Alice died and became a famous dead artist and her works sell for $200K, her estate gets $20K, etc. To me, this is the sole redeeming value of NFTs, but only if artists can actually keep those rights and revenue streams. The usual path of such things is that middlemen insert themselves to engage in their usual rent-seeking behaviors.
- platz 5y ago
  NFTs don't liscence or provide rights to artworks; they are useless to artists.
- ww520 5y ago
  RIAA collects a loyalty every time a song is played just because they hold the copyright. Why isn’t there moral outrage on that?

bondarchuk 5y ago

You can just wrap the NFT inside a holding contract, then trade access to the holding contract without triggering an actual sale. At least on ethereum you can do this.

swinglock 5y ago

> Imagine if cryptocurrency started doing that? It happened, that's SafeMoon. Sounds like a Ponzi scheme? That's their selling point!

bitcurious 5y ago

>Imagine if cryptocurrency started doing that? Isn't this essentially what proof of steak is? A tax on all transactions proportional to how much you already own, but disproportionately applied to smaller users. That last bit is key. Speaking of Ethereum for a second - the largest asset owners will be institutions which can transact off-chain, which means that fees are being payed more often by folks that don't have that kind of scale.

wearywanderer 5y ago
I've always felt that the best way to prove steaks is with forks.
- ASalazarMX 5y ago
  It's a shame that ecoins with proof-of-steak can't be ecofriendly. Maybe that's for the best, since you could accidentally eat your steaks and lose your money.
  - baryphonic 5y ago
    You referring to proof-of-steak directly releasing greenhouse gases in the form of bovine farts?
- bitcurious 5y ago
  Quick, invest in Beyond Meat! It’s the future of blockchain.
smrq 5y ago
First we had proof of work, and it consumed all the world's processing power. Then we had proof of space, and it consumed all the world's data storage. Then we had proof of steak, and it consumed all the world's food. Thus ended humanity.
- visualradio 5y ago
  First we had gold, and the Spanish looted the New World to acquire it and found themselves no richer. Then we had real estate mortgages and used deeds to estates instead of gold, and the speculators wrote up intangible asset prices as high as possible to get more money from central banks. Then we had digital gold, and no one used it because money is credit and no one wanted to pay excessive interest to internet goldbugs. Ideally we would recognize that issuing money is a collective problem and attempt to fix our public money system, which is based on real estate mortgages. We can fix it by recognizing that when a home has a fixed capital replacement cost of $150,000 and broker has written the comparable sales price up to $400,000 that it is not necessary to publicly guarantee the mortgages at the comparable sales price of $400,000 only the $150,000. Or to at least cap the public mortgage guarantees at double the replacement cost ($300,000) whenever the comparable sales price ($400,000) is greater. It perhaps goes against libertarian sensibilities to claim that if the labor and material cost of the replacing all of the structures, fixtures, equipment, appliances conveyed with an estate is $150,000 and the comparable sales prices of $400,000 that the estate has 'intrinsic value' of $150,000 rather than just subjective value of $400,000. But with federally backed mortgages the $400,000 is not a long run competitive market value, it is a number which a specific set of brokers and banks have fixed upon which the central bank then commits to backing regardless of how they pick it. Requiring loans which expand legal tender to be issued on at least half security of the replacement cost of non-obsolete fixed capital would be a reasonable short term reform to stabilize the public money system in case private crypto money doesn't work out.

geofft 5y ago

Moreover, how is this not just a form of DRM?

a1369209993 5y ago
You can still copy the underlying data however you like - if the NFT says http://example.com/foobar.jpg http://example.com/foobar.jpg you can just do `wget http://example.com/foobar.jpg http://example.com/foobar.jpg`, regardless of whether you've even seen the NFT, and assuming you can access foobar.jpg at all, you can then copy it however you like.

draw_down 5y ago

Some people don’t appreciate the existence of kulaks, it is true.

twox2 5y ago

Behind the scenes the NFT is just a smart contract standard. The royalty isn't really baked into the contract itself, but the platform that's using to exchange it.... So lots of projects with this perpetual royalty might get moved to another platform like opensea or rarible, and the royalty goes poof. Also, the royalty is just artists getting commission on their work. Most NFT minting platforms worth anything allow the artist to mint from their wallet.

bsedlm 5y ago

just sounds like automated royalties to me (with infinite copyright). AT least when an NFT does this, it is known in advance; as opposed to legistative action changing the goal posts during the match. Also, I suppose there can be a way to cancel the royalties by making a meta-NFT (of sorts) that "owns" the NFT which stays in one place forever so that the meta-NFT can be traded instead.

Pils 5y ago

I believe this is wrong. Creator percentage isn't coded into the Ethereum-based NFT's themselves, it's done at the marketplace level. Currently, if you bought an NFT on Foundation and sold it on Opensea, there isn't a way to encode directly into the NFT a guarantee Foundation's royalty agreement would be followed. EIP-2981 is the draft protocol-level NFT royalty implementation, but you will note that it's opt-in and NFT marketplaces do not need to respect it (although theoretically they could be blacklisted/sued). It explicitly outlines why a non opt-in implementation wouldn't work: > It is impossible to know which NFT transfers are the result of sales, and which are merely wallets moving or consolidating their NFTs. Therefore, we cannot force every transferFrom() call to involve a royalty payment, as not every transfer is a sale that would require such payment. We believe the NFT marketplace ecosystem will voluntarily implement this royalty payment standard to provide ongoing funding for artists and other creators, and NFT buyers will assess the royalty payment as a factor when making NFT purchasing decisions. [0] The only non opt-in royalty percentage implementation I know of is Euler Beats, but that royalty percentage only applies to printing new NFTs through their bonding curve. If you bought an Euler Beat print through a third party, you could simply use the safeTransferFrom function and avoid royalties entirely. As someone pointed out in this thread, this arrangement is very common for high end art already, since it helps keep incentives aligned between collectors and the artists. [0] https://eips.ethereum.org/EIPS/eip-2981#universal-royalty-payments https://eips.ethereum.org/EIPS/eip-2981#universal-royalty-pa...

seibelj 5y ago
I am an author of this EIP. You are correct. It is impossible to enforce unless the chain itself has NFT trading as part of a core feature. Otherwise it’s the honor system. But IMO this will be quite successful given the social pressure.
smegger001 5y ago
pardon my ignorance but how exactly does it force royalties to transfer? couldn't a owner just transfer the underlying etherum coin that is used for the NFT to another wallet address just like any other ethereum coin? and likewise exchange it in a new smart contract?

nathias 5y ago

compare it to what actually exists in the mainstream not some dark fears of possible dystopias ...

dumbfounder 5y ago

I have never heard this take before, you actually think it's evil? Insidiously so? I honestly can't even conceive of what your argument is. First off, the facts are a bit off, NFTs cannot currently contain hardcoded royalties (or whatever you call it). Right now it is voluntarily paid by the marketplaces that sell NFTs. But I think at some point it will evolve to be guaranteed. Sort of. But either way, if it's all transparent, then why is it evil? Maybe it acts as a deterrent of sales in the future, but I like that it can be controlled by the creator. It's everyone else's choice on whether to buy it, or whether that constitutes ownership. If you don't like it, don't buy it. Evil? Really? I don't get it at all. Not one single iota. But, willing to hear your argument for that. "Hardcoding wealth inequality" is hardly an argument. It's not like there are a ton of people creating a new superclass of rich artists. There are a few, but that isn't the way it will shake out long term. At least, any more than traditional art. Is all wealth inherently evil to you? Maybe that's your argument? I guess that's it? On your "imagine if cryptocurrency started doing that", I am sure there are cases where this happens. ZCash is one where 10% of mined blocks go back to the original investors and founding team. Not sure how I feel about that, I do think it's high, but I certainly don't think it's evil. If people don't like it, they won't use it, and something will take its place. No biggie.

sneak 5y ago

> but I want to talk about how insidiously evil it is that NFTs can be coded to send the original creator a percentage $ cut off of every subsequent transaction for all time This is not accurate.

skilesare 5y ago

They've already been designed. You just have to go all the way with it to create something interesting Http://catallax.info