4 ms·

>They can decide to sell 10 copies, and dictate that if they are resold, the photographer gets a 20% royalty. Suppose that I want to sell my copy, but do not w

by Imnimo 5y ago

>They can decide to sell 10 copies, and dictate that if they are resold, the photographer gets a 20% royalty. Suppose that I want to sell my copy, but do not want to pay the 20% royalty. What stops me from selling it for 1 cent on-chain, but buyer paying me real price off-chain? How can a creator realistically expect to receive their royalty cut?

fleddr 5y ago
It's an interesting loop hole. That can actually be solved with a smart contract that wouldn't allow you to sell below the purchase price, or at least not that far below it. Anything can be programmed in a smart contract, and they're transparent, so if the royalty rules are not acceptable to you, don't buy it.
- Imnimo 5y ago
  The flip side of such a contract is that you would be locked out of selling the item if its value dropped too far (thereby depriving the creator of royalties), and if the value increased, the royalties would only be ensured on the original price. I think this is more than just a loophole - it's a fundamental weakness of the smart contract system. The smart contract can audit things which are on the blockchain, but cannot govern external actions. This is fine when the only objects the contract cares about are digital tokens, but once you integrate things like real-world art and associated rights, it becomes very easy to circumvent.
  - fleddr 5y ago
    I'm not sure I'm getting you. If you want to do things outside the blockchain against the terms set by the NFT owner, you're in violation of rights (if copyright is properly integrated, currently not the case). Can you do that? Sure. But it's no different from pirating anything. I think we're overstating this example. An NFT owner might also claim zero resell royalties and instead go for a higher first-sale price. Or set the royalty percentage lower. I think some balance will be found. A far bigger issue with NFTs is a single person buying their own NFTs using different wallets. This artificially boost the price, some fool falls for this high perceived value, buys it, and is then forever stuck with it. The other big issue is front running. Knowing ahead of time which projects will be dropped on major marketplaces. It's insider trading basically.

by Imnimo 5y ago

fleddr 5y ago

It's an interesting loop hole. That can actually be solved with a smart contract that wouldn't allow you to sell below the purchase price, or at least not that far below it. Anything can be programmed in a smart contract, and they're transparent, so if the royalty rules are not acceptable to you, don't buy it.

Imnimo 5y ago
The flip side of such a contract is that you would be locked out of selling the item if its value dropped too far (thereby depriving the creator of royalties), and if the value increased, the royalties would only be ensured on the original price. I think this is more than just a loophole - it's a fundamental weakness of the smart contract system. The smart contract can audit things which are on the blockchain, but cannot govern external actions. This is fine when the only objects the contract cares about are digital tokens, but once you integrate things like real-world art and associated rights, it becomes very easy to circumvent.
- fleddr 5y ago
  I'm not sure I'm getting you. If you want to do things outside the blockchain against the terms set by the NFT owner, you're in violation of rights (if copyright is properly integrated, currently not the case). Can you do that? Sure. But it's no different from pirating anything. I think we're overstating this example. An NFT owner might also claim zero resell royalties and instead go for a higher first-sale price. Or set the royalty percentage lower. I think some balance will be found. A far bigger issue with NFTs is a single person buying their own NFTs using different wallets. This artificially boost the price, some fool falls for this high perceived value, buys it, and is then forever stuck with it. The other big issue is front running. Knowing ahead of time which projects will be dropped on major marketplaces. It's insider trading basically.