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"the NFT hype never made any sense whatsoever to begin with" I felt the same, but now regard NFTs as the first meaningful application of blockchain. First, le

"the NFT hype never made any sense whatsoever to begin with" I felt the same, but now regard NFTs as the first meaningful application of blockchain. First, let's talk about land registries. In developed countries, the state administers a land registry. There is a strict, human-administered API against this registry. It allows users to inspect the full history of land; cause property splits/mergers; execute land exchange; and there is capacity for extensions like water-rights and native title. There is formal governance around some of these operations - conveyancing; council approval. NFTs have the potential to do something similar, initially for artwork. Imagine if every time an artist created a painting, they issued a NFT against it, and got this authorised by an authority. That authority does not yet exist, but Christie's and Sotheby's could set up in this space with low effort. Each time a transfer of the artwork occurs, both the NFT and the physical artwork change ownership to the new owner. This would have a snowball effect, and quickly become the new standard for provenance. Insurance companies would insist that works were marked on the exchange. A stolen artwork would be nearly worthless. It would be pointless to duplicate artwork, because the sold duplicate would effectively destroy the original. Extension: firearms. Firearms are valuable goods, and would soon be forced onto this registry. Perhaps the state would encourage this transition by asking that firearms ranges mark the transition of guns to and from the range premises by marking this on the chain. Extension: wine. There is a live problem in China, with rubbish wine being fraudulently marked as premium Australian varieties. Each bottle could be chipped in the cap with an on-chain identifier. In the wine shop, you could use your phone to scan the identifier, and witness custody of that wine back to the producer. Evolution: complex goods. The next evolution would be to trace the grapes that went into the wine back to the vineyard that they came from. Reputation becomes very important in this system. This would encourage a new type of auditing profession, who serve a similar role as conveyances, but for chain operations. Once you have that, you could mark carbon credits of goods on the chain, you could have eggs tagged as being free-range or organic, etc.

prepend 5y ago
I think your examples are good cases for any registry. NFTs aren’t particularly good for this as they are expensive in their current form. Any transaction should be very low cost to process and there would be no value to the NFT itself, but to the thing tracked by the NFT. So I think the right play would be to not speculate and wait for a government to use blockchain/NFT for registries. The land registry is a good idea, but is already done without blockchain/NFt so I’m not sure the value of layering this on. For these things to work, it’s better to have a common operator under a monopoly (government) and fees be nominal. This is how deeds work in the US today, but there’s some clerk filing sheets in a courthouse and processing transactions. This can be improved by databases, etc but NFT doesn’t provide much benefit over a parcel number. As we automate this process, we would not have a market for selling NFTs, we would just need a robot instead of a clerk.
- cturner 5y ago
  Here are the qualities that I think are special about this model: (1) the platform is organic; (2) critical mass kicks in pretty quickly. Organic: it would be unrealistic to attempt to solve the wine problem as a one-off registry. But once the infrastructure exists, it becomes trivial to solve the wine problem. You point out that many of the individual scenarios could be solved by a conventional registry. This is good criticism, thanks. Maybe the role of the chain is not to be a log of everything, but rather to be a system of governance. Participating registries need to be onboarded to the chain, and need to abide by the rules to stay onboarded. Governance consists of humans (proof-of-stake parties) who serve as regulators and magistrates for participating registries. They ensure that the APIs are in good order, and have the ability to excommunicate systems that are not playing by the system. In this model, the chain serves the same role as a nation state, but it does not have land. The artwork problem is still useful, though, because it is a problem that allows you to bootstrap the platform. Analogy: Amazon was initially about books, but Amazon was never really about books.
  - prepend 5y ago
    Your use case is much cheaper with just a wiki. The NFT layer only adds lots of cost and speculation. Or a single trusted entity is more likely to organically arise than an NFT market solution. The issue that these sound decent in theory, but in practice they suck because of costs. And for sustainability, I’d rather deal with the government to run it. If they would arise organically, they would have already. The problem is that the incentives is for jerks trying to make money than people to collaborate.
notahacker 5y ago
As you acknowledge, registries and licenses with APIs are already achievable without NFTs or other types of blockchains, without the expensive computation or assumption that the certifying authority isn't actually the appropriate party to validate their correctness. We already know who owns the Mona Lisa, and since NFTs neither diminish its appeal to art thieves nor provide the Louvre with anything to display in its absence they're no more an advance in protecting art than Postgres. The only area where I can see something like NFTs working is pure digital goods which can only be enjoyed by the keyholder decrypting them. (This sort of DRM also exists in other forms, but the risk of the vendor deactivating the online validation system when they no longer wish to maintain an old game is a real one)
- cturner 5y ago
  Computation: proof-of-stake is coming - expensive computation won't be a factor. With that said, if you did everything on-chain, that would generate a lot of activity. (In a separate reply, I have spoken of focusing on the chain for governance, and leaving other details in chain-connected registries.) Proof-of-stake participants are strongly motivated to ensure the integrity and good reputation of the platform. By analogy, this is a bit like the Netherlands Water boards. They have power and motivation to do whatever it takes to ensure the dikes are in good order. The population are motivated to support them in this. Everyone suffers if the water gets past the dikes: it destroys the platform. Pure digital goods are easily duplicated with no loss of utility. For example, you can copy a piece of music and lose nothing from that. The value I see relates to scarce goods.
hiq 5y ago
Blockchain doesn't help in any of the scenarios you describe. You're still trusting a third-party to release the data. Whether they release it via a blockchain or via a website, what's the difference? The trust model is the same. You allude to a standard, which indeed is always valuable since it allows people to exchange freely with each other. In your other answers, you seem to take it for granted that using a blockchain means everything is interoperable. But a blockchain is no guarantee that any standard would prevail, especially in the long run. There are already tokens using different interfaces, or even using different blockchains. At this point, "using blockchain" is equivalent to having a public API, no more no less. That's obviously already possible without a blockchain. So I don't see why you think the use-cases you mentioned benefit from blockchain at all.
- cturner 5y ago
  It suits the state to run the land registry: (1) a state is a barrier around land, which can be subdivided; (2) the state has incentive to do this; (3) the state can use law and courts to enforce it. There are other problems that need registries where there is no party with inventive and means to act as the state does above. I think the physical-art and wine examples fit that. The key quality of blockchain is that it allows groups to form consensus. Even though they compete on some matters, all stakeholders want the platform to succeed. If it doesn't, their investment is worthless. Hence, Blockchain can act as a synthetic state for enforcing standards and governance of registries. This may go as far as having elections, rulings. The registry data itself could live off-chain. [Sure, there are details to be sorted out here. Maybe the blockchain entity would control all APIs, to allow it to enforce standards against the registries. Those APIs may not necessarily be on the blockchain.] Due to incentives, I don't think the trust model is the same as a standalone registry. One of the many challenges of dealing with data providers at the moment is they can routinely have low data quality and still get paid. Whereas a state would intervene if a land registry fell below standard. "In your other answers, you seem to take it for granted that using a blockchain means everything is interoperable" This is a real problem. I think the foundation problem to solve is how to get somebody to fill a role equivalent to the state in the land registry example. Once you have that, you have a path to solving issues such as this. Thanks for poking at this.
bhandziuk 5y ago
> It would be pointless to duplicate artwork, because the sold duplicate would effectively destroy the original If someone cares about having a piece of art badly enough to steal it or create a fake do they care at all about what an NFT says about who owns it? I think we live in a world where holding the real thing in your real hands is all that matters.
- cturner 5y ago
  "I think we live in a world where holding the real thing in your real hands is all that matters." In regions with the rule of law, there are things more important than physical possession - ownership, contract.
  - NoGravitas 5y ago
    Right, but NFTs don't solve those, either. In a dispute between the court and the blockchain, the court wins.
    - cturner 5y ago
      "Right, but NFTs don't solve those, either. In a dispute between the court and the blockchain, the court wins." 1) In contracts, you can add a clause that mandates a dispute-resolution process that must take place before either side goes to real courts. These could be codified into the blockchain contracts. If that process is well run, I assume the court will have no reason to over-rule it. 2) In blockchain matters, is there a distinct party to file against? Where there is, do you know who they are? And are they in the same jurisdiction as you?
audunw 5y ago
> Extension: wine. There is a live problem in China, with rubbish wine being fraudulently marked as premium Australian varieties. Each bottle could be chipped in the cap with an on-chain identifier. In the wine shop, you could use your phone to scan the identifier, and witness custody of that wine back to the producer. I'm not so sure it'll work well for items for consumption. There are several issues - At any point you can swap out the content of the wine (if you can re-cap it), and sell the genuine wine to someone who trusts the person doing the fraud. - You're somewhat dependent on many people actually scanning the bottle. You can duplicate a bottle, and if someone doesn't scan it, it's not detected. If you've managed to insert yourself in the supply chain and only care about milking it for profit until you're detected and then running away with the money, you might get away with it for a while. - I know of at least one liquor from China that marks each bottle with an ID that you can check. It achieves much of the same benefit without blockchain if the supply chain isn't very long and complex I also don't think PoW or PoS makes any sense with these use-cases where you track items or handle logistics. You probably want some organization setting standards for auditors, and to handle necessary changes to the blockchain algorithm and such. So might as well be proof-of-authority.

prepend 5y ago

I think your examples are good cases for any registry. NFTs aren’t particularly good for this as they are expensive in their current form. Any transaction should be very low cost to process and there would be no value to the NFT itself, but to the thing tracked by the NFT. So I think the right play would be to not speculate and wait for a government to use blockchain/NFT for registries. The land registry is a good idea, but is already done without blockchain/NFt so I’m not sure the value of layering this on. For these things to work, it’s better to have a common operator under a monopoly (government) and fees be nominal. This is how deeds work in the US today, but there’s some clerk filing sheets in a courthouse and processing transactions. This can be improved by databases, etc but NFT doesn’t provide much benefit over a parcel number. As we automate this process, we would not have a market for selling NFTs, we would just need a robot instead of a clerk.

cturner 5y ago
Here are the qualities that I think are special about this model: (1) the platform is organic; (2) critical mass kicks in pretty quickly. Organic: it would be unrealistic to attempt to solve the wine problem as a one-off registry. But once the infrastructure exists, it becomes trivial to solve the wine problem. You point out that many of the individual scenarios could be solved by a conventional registry. This is good criticism, thanks. Maybe the role of the chain is not to be a log of everything, but rather to be a system of governance. Participating registries need to be onboarded to the chain, and need to abide by the rules to stay onboarded. Governance consists of humans (proof-of-stake parties) who serve as regulators and magistrates for participating registries. They ensure that the APIs are in good order, and have the ability to excommunicate systems that are not playing by the system. In this model, the chain serves the same role as a nation state, but it does not have land. The artwork problem is still useful, though, because it is a problem that allows you to bootstrap the platform. Analogy: Amazon was initially about books, but Amazon was never really about books.
- prepend 5y ago
  Your use case is much cheaper with just a wiki. The NFT layer only adds lots of cost and speculation. Or a single trusted entity is more likely to organically arise than an NFT market solution. The issue that these sound decent in theory, but in practice they suck because of costs. And for sustainability, I’d rather deal with the government to run it. If they would arise organically, they would have already. The problem is that the incentives is for jerks trying to make money than people to collaborate.

notahacker 5y ago

As you acknowledge, registries and licenses with APIs are already achievable without NFTs or other types of blockchains, without the expensive computation or assumption that the certifying authority isn't actually the appropriate party to validate their correctness. We already know who owns the Mona Lisa, and since NFTs neither diminish its appeal to art thieves nor provide the Louvre with anything to display in its absence they're no more an advance in protecting art than Postgres. The only area where I can see something like NFTs working is pure digital goods which can only be enjoyed by the keyholder decrypting them. (This sort of DRM also exists in other forms, but the risk of the vendor deactivating the online validation system when they no longer wish to maintain an old game is a real one)

cturner 5y ago
Computation: proof-of-stake is coming - expensive computation won't be a factor. With that said, if you did everything on-chain, that would generate a lot of activity. (In a separate reply, I have spoken of focusing on the chain for governance, and leaving other details in chain-connected registries.) Proof-of-stake participants are strongly motivated to ensure the integrity and good reputation of the platform. By analogy, this is a bit like the Netherlands Water boards. They have power and motivation to do whatever it takes to ensure the dikes are in good order. The population are motivated to support them in this. Everyone suffers if the water gets past the dikes: it destroys the platform. Pure digital goods are easily duplicated with no loss of utility. For example, you can copy a piece of music and lose nothing from that. The value I see relates to scarce goods.

hiq 5y ago

Blockchain doesn't help in any of the scenarios you describe. You're still trusting a third-party to release the data. Whether they release it via a blockchain or via a website, what's the difference? The trust model is the same. You allude to a standard, which indeed is always valuable since it allows people to exchange freely with each other. In your other answers, you seem to take it for granted that using a blockchain means everything is interoperable. But a blockchain is no guarantee that any standard would prevail, especially in the long run. There are already tokens using different interfaces, or even using different blockchains. At this point, "using blockchain" is equivalent to having a public API, no more no less. That's obviously already possible without a blockchain. So I don't see why you think the use-cases you mentioned benefit from blockchain at all.

cturner 5y ago
It suits the state to run the land registry: (1) a state is a barrier around land, which can be subdivided; (2) the state has incentive to do this; (3) the state can use law and courts to enforce it. There are other problems that need registries where there is no party with inventive and means to act as the state does above. I think the physical-art and wine examples fit that. The key quality of blockchain is that it allows groups to form consensus. Even though they compete on some matters, all stakeholders want the platform to succeed. If it doesn't, their investment is worthless. Hence, Blockchain can act as a synthetic state for enforcing standards and governance of registries. This may go as far as having elections, rulings. The registry data itself could live off-chain. [Sure, there are details to be sorted out here. Maybe the blockchain entity would control all APIs, to allow it to enforce standards against the registries. Those APIs may not necessarily be on the blockchain.] Due to incentives, I don't think the trust model is the same as a standalone registry. One of the many challenges of dealing with data providers at the moment is they can routinely have low data quality and still get paid. Whereas a state would intervene if a land registry fell below standard. "In your other answers, you seem to take it for granted that using a blockchain means everything is interoperable" This is a real problem. I think the foundation problem to solve is how to get somebody to fill a role equivalent to the state in the land registry example. Once you have that, you have a path to solving issues such as this. Thanks for poking at this.

bhandziuk 5y ago

> It would be pointless to duplicate artwork, because the sold duplicate would effectively destroy the original If someone cares about having a piece of art badly enough to steal it or create a fake do they care at all about what an NFT says about who owns it? I think we live in a world where holding the real thing in your real hands is all that matters.

cturner 5y ago
"I think we live in a world where holding the real thing in your real hands is all that matters." In regions with the rule of law, there are things more important than physical possession - ownership, contract.
- NoGravitas 5y ago
  Right, but NFTs don't solve those, either. In a dispute between the court and the blockchain, the court wins.
  - cturner 5y ago
    "Right, but NFTs don't solve those, either. In a dispute between the court and the blockchain, the court wins." 1) In contracts, you can add a clause that mandates a dispute-resolution process that must take place before either side goes to real courts. These could be codified into the blockchain contracts. If that process is well run, I assume the court will have no reason to over-rule it. 2) In blockchain matters, is there a distinct party to file against? Where there is, do you know who they are? And are they in the same jurisdiction as you?

audunw 5y ago

> Extension: wine. There is a live problem in China, with rubbish wine being fraudulently marked as premium Australian varieties. Each bottle could be chipped in the cap with an on-chain identifier. In the wine shop, you could use your phone to scan the identifier, and witness custody of that wine back to the producer. I'm not so sure it'll work well for items for consumption. There are several issues - At any point you can swap out the content of the wine (if you can re-cap it), and sell the genuine wine to someone who trusts the person doing the fraud. - You're somewhat dependent on many people actually scanning the bottle. You can duplicate a bottle, and if someone doesn't scan it, it's not detected. If you've managed to insert yourself in the supply chain and only care about milking it for profit until you're detected and then running away with the money, you might get away with it for a while. - I know of at least one liquor from China that marks each bottle with an ID that you can check. It achieves much of the same benefit without blockchain if the supply chain isn't very long and complex I also don't think PoW or PoS makes any sense with these use-cases where you track items or handle logistics. You probably want some organization setting standards for auditors, and to handle necessary changes to the blockchain algorithm and such. So might as well be proof-of-authority.