Comment by wokwokwok | Hacker News Reader

Comment by wokwokwok | Hacker News Reader

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The point you’re making is valid, but you’re side stepping the key concern being raised.

The tokens you acquire are worth nothing.

Nothing about owning a token grants you any rights to anything other than what some other person is willing to pay/exchange it for.

So if a game developer chooses to accept tokens, you can use them; but that developer can at any time choose to stop accepting tokens or a subset of tokens making what you own worth actually nothing.

Now... for a regulated system of tokens (eg currency) a developer can’t do that: they are legally bound to accept fiat currency even though it is not redeemable for any “real” equivalent (eg gold).

Since a token is not bound to the DRM access to an item (say, image for example), it’s totally pointless to asset ownership with it, because it does not prevent the copy of the original digital asset.

The best you could ever hope for would be a regulated system, in which access to an asset via DRM was granted by a token.

...at which point, any “decentralised” benefit is lost.

So ultimately, the risk is 100% on the buyer here.

What you buy may be redeemable for something for some period of time... but that is true of any kind of token.

The “uniqueness” of the NFT is an illusion; it does not offer any strong guarantee of uniquely representing an actual asset.

> Now... for a regulated system of tokens (eg currency) a developer can’t do that: they are legally bound to accept fiat currency even though it is not redeemable for any “real” equivalent (eg gold).

This isn't true in general. Legal tender status is very loosely an obligation to accept for existing debts, but it is not an obligation to accept it as, say, a means of accepting a offer. So unless they are giving you goods first, and the looking for payment (which certainly is not the norm for digital goods), they are under no obligation to accept currency.

But that's really why everyone will always accept them, because they can pay their debts/taxes with them. It's probably a common misconception because it's so close to correct.

Rephrasing your questions and critiques more broadly: What is the point of all this digital infrastructure if no one uses it? Why would anyone use it?

This is a more difficult question for NFTs as the market is even smaller than the financial use cases which has been driving blockchain applications. It'll take some time for seemingly legitimate and long-lasting value in areas for NFT to emerge as they are still being explored and developed.

However, no matter how you frame it, rhe value proposition for applications comes down to the value add characteristics of the networks they are built on top of.

> The tokens you acquire are worth nothing.

The tokens worth is determined by the market place that emerges around the tokens characteristics.

Some tokens are censorship resistant and run on globally accessible networks so that they are not easily erased, their ownership is easy to prove, and their history is reliably known. Some tokens are required to access other marketplaces or services because they have properties that make them more easy to use as traditional currencies. Some tokens allow for self-ownership paradigms.

Again, the tokens acquired carry the value of the characteristics of the networks in which they are issued. What these characteristics are valued as and actually "worth" in real economic terms is dependent on their demand.

> The “uniqueness” of the NFT is an illusion; it does not offer any strong guarantee of uniquely representing an actual asset.

This is only true if the NFT isn't accepted as value. If the characteristics I described earlier indeed do become valued, then the ledger which holds the claim i.e. the NFT will be taken as the source of truth for representing the ownership of the claimed asset. Its the theory of accounting applied to a different space.

> the NFT will be taken as the source of truth for representing the ownership of the claimed asset...

I simply can’t see how that is possible for digital assets you can copy and paste and have two copies of the original asset; it only works for physical assets where there can only be one copy of the asset, ever.

You’ve hit it on the head: what does it mean to own an image when ten other people also “own” a copy of it, and any of them can create more copies other people can “own”.

It’s meaningless, unless you assert ownership entitles you to additional legal rights beyond what the token conveys... and in which case, how the hell is that different from the same thing with no crypto involved?

> You’ve hit it on the head: what does it mean to own an image when ten other people also “own” a copy of it, and any of them can create more copies other people can “own”.

Also worth remembering: doing anything with a digital asset involves automatic creation of countless of copies. When you're viewing an image from your computer's storage, you already have at least three copies at that moment - one in storage, one in RAM, and one in video memory. There may be another one in your screen's buffer too. If you try to send it through the network, every switch and router along the way effectively creates its own temporary copy.

This is to emphasize: ownership as a concept makes no sense in the world of bits. It doesn't exist. Ownership is defined by agreement between people; these days, usually through the legal framework.

> unless you assert ownership entitles you to additional legal rights beyond what the token convey

This is precisely the idea to a certain extent. The ledger serves as proof of ownership which then allows access to entitlements dictated by that ownership. This being done in a digital first way is another aspect as well (although not really conceptually mind blowing to me personally).

> how the hell is that different from the same thing with no crypto involved?

This goes back to what I said earlier about the characteristics of the underlying network driving the value. The differences can be in things like the peer-to-peer nature or the decentralized infrastructure which provides a degree of censorship resistance or improved accessibility.

We're at the point where credible evidence of the value added by these characteristics is still being explored. You can certainly make some level of argument as to why the decentralized nature of these protocols is better than the traditional alternative, but even I'll admit its difficult to parse through the noise of speculation and hype for the arguments that may be worth a damn.

The idea of distributing control, responsibility, costs, and other aspects of operating a system away from singular points of failure is an idea that seems worth investigating and to me this is what blockchain is doing. NFTs are a different flavor of exploration then that of cryptocurrencies.

Possession of the private key also allows you to create signatures which prove your ownership, while not revealing your private key. Artworks could be encrypted and only decryptable by such signatures. Client applications could be built to incorporate this.

We have a big problem today in that our information technology's ability to infinitely create copies of digital artifacts seemingly breaks the incentive mechanism to create. I.e. art, news, authorship worked better when you could sell physically sell copies of your album, book, painting. This has resulted in a glut of low quality stuff.

Think of the long term. It would be very good for society to solve this problem. With the distribution abilities of the internet, plus the ability to monetize adding incentives to create, we should see much more, and higher quality art. It would enable more of our economy to move online, which would be good for the environment. I.e. humans are mostly interested in social status. Today we show that status by creating and showing off possessions. But also we need jobs. What will people do for work in 2050? Perhaps we'll still be busily working to climb the pile of monkeys, but now with virtual goods. That's more sustainable than the current situation.

For a hacker & technology forum, Hacker News is remarkably negative on crypto topics. Part is a justifiable reaction against the hype. Another part I think is FOMO. But also, the crypto space is only partially about technology. It is very inefficient technology from a functionality point of view. But from an economic point of view, where the problem is coordinating human activity in the way that money does, I think there's a lot of potential there.

At a certain point there is more risk in being a "permabear" than there is in taking a measured interest. The crypto space has been growing for 12 years ... is it really just a giant fraud at this point? No value, nothing of interest at all?

> For a hacker & technology forum, Hacker News is remarkably negative on crypto topics. … The crypto space has been growing for 12 years ... is it really just a giant fraud at this point? No value, nothing of interest at all?

The negative reaction is _due_ to HN being a technology-heavy forum: the blockchain field is a marketing invention and divides into two camps: Merkle trees, which are useful but not new, and everything else, which is uncompetitively reinventing commonplace concepts with language designed to attract speculators’ money. For a decade, salespeople have been showing, repeating marketing points which don’t hold up to much thought, and hammering the “use your money to make me rich” message, so it’s not surprising that it’s hard to get attention with the same spiel now.

Put another way: after 12 years, huge amounts of money and attention, where’s anything clearly better than its predecessor? (For the user, not the seller) That’s considerably longer than it took for the web to have a huge impact on advertising, sales, dating, travel, banking, research, job hunting, etc. despite much lower barriers to adoption. Someone trying to invent a new DRM system to make signed prints isn’t remotely close.

> where’s anything clearly better than its predecessor?

At the moment, there isn't a single alternative product for a state-free currency as a store of value that has reached the valuation of Bitcoin.

I'm not even a Bitcoiner, but if this isn't proof to you at this point, nothing will satisfy you. The proof doesn't have to convince you it's the future of currency, but it should certainly statisfy the question of "how has blockchain enabled anything new and interesting?".

The truth is, blockchain is less of a technological innovation than it is an organizational one. It is technology that attempts to digitize human organizational patterns as opposed to simply analog processes.

Those selling crypto to the moon and profiting off of the hype certainly ruin it for everyone. The promises, the lies, the failure to deliver is certainly an issue to take up. At the same time, there is quite a bit behind the lies that is worth looking at.

> At the moment, there isn't a single alternative product for a state-free currency as a store of value that has reached the valuation of Bitcoin.

I thought the Bitcoin people stopped referring to it as a currency a few years ago when it became obvious that it had failed to be capable of filling that role? The current “store of value” sales pitch seems likely to follow a similar trajectory since, unlike a reserve currency like the USD or a traditional commodity like gold or real estate, it has no inherent value other than the current social consensus and is thus highly volatile.

This comes back to the same question of what value it offers. Someone who wants buy or sell things defaults to faster, cheaper, and safer options. Someone who wants to save value has faster, cheaper, safer options which have much longer track records of predictable valuation. A devout libertarian who thinks “state-free” is important similarly has a range of options, many of which do not conveniently provide their government with an itemized log of every transaction.

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