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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.

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.

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?

Their incentive is from getting a cut of transactions. And in theory, putting their items on blockchain would be more appealing to people spending money because blockchain makes them more permanent. The percentage of people that actually cares is really small so it’s unknown whether it’s worth it or not to implement it.

There’s also an interesting use case where game history is attached to the item. For example if you know some counter strike skin was used by pro player to win big tournament and that history is all locked into the blockchain. If I were going to be spending a ton of money on said skin, I would feel more comfortable doing so vs. if all that data is in the developers private database. Would other people feel the same way? Who knows

Why do this on a blockchain instead of with a central authority? If they have the copyright, they don’t need a blockchain they can just use a database. If they don’t have or don’t want to enforce copyright, why would the players want scarcity?

Sure, you can go and build your own API and setup your own trading infrastructure or simply use a public infrastructure that already exists. This also means that players can use existing NFT markets to trade these or even regular markets can be adapted to simply allow trading these.

Having the ability to take your digital cards and store them wherever you want and trade them with whomever you want is really nice, if you're trying to replicate standard offline trading card games.

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.

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.

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.

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.

> NFTs are not infinite. They are provably scarce.

But the art itself is not scarce. In the physical realm, it's like a painting that can exactly replicate itself. The certificate of authenticity doesn't, though, and is the scarce component.

I think it's reasonable for someone to ask "if the duplicates are always exactly the same, what is the value of a certificate of authenticity? It would be drastically harder to forge a fake than it is to hit the button to make an exact copy".

It shifts the entirety of the value away from the art. The art itself is worthless. Anyone that wants a copy of the art can do so with a Google search. You have a scarce digital token proving that you are the rightful owner of a worthless piece of art.

That's why I don't see it working.

I'm not necessarily an NFT proponent, but to be fair, you can also duplicate art in the real world. Forgeries and replicas of the Mona Lisa and other famous art exist, and are sometimes so good they fool museum curators for years. Yet, they're almost worthless compared to the original. Why?

Because they’re still “almost”. The NFT is made up of digits values that can be replicated exactly - a brush stroke or photography negative cannot.

Reproductions are not "worthless" by any stretch of the imagination. They are worth less than the original but this is easily understandable. It's because they are not the same thing. On the other hand, digital copies are exact to one another and also mass produced by a machine (a computer) and thus not having a different "story" that could set them apart.

The concept of private property or ownership predates all government.

Of course governments and police rarely get involved with small property disputes unless part of something larger like an assault.

Smartphone locking is similar to NFTs in that it is an extrajudicial process of enforcing property rights.

Likewise we also have algorithms that can take away all your photos and emails with basically no recourse to government or person.

NFTs just don’t seem that different to many things we’re already doing.

As long as you don't put an armed guard around, the property depends only on the law. The law depends mostly on the population paying attention to the jurys' verdicts.

Without that, there is nothing stopping me from selling/buying/giving/using/renting a gif, a building, a village, or a city.

E.g. what apes have is not a property. You only keep stuff as long as your alpha doesn't want it. That's a different concept.

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.

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”

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.

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.

NFTs are generally being used for digital art at this time. Physical art of course still has this requirement.

But authenticity is only a concern in physical art.

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.

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.

Of course it does. The NFT is created and recognized by the artist's public Ethereum address which can only be generated by their private key.

Full rights can be attached to the artwork, as was done with the Hashmasks sale: https://www.thehashmasks.com/

It is completely up to the artist to customize. It can be embedded into an NFT just like a license.md file can be embedded into an open source code repository. It can be explicit, rights can be transferable, or non-transferable.

Any other address producing an NFT is a forgery.

Blockchain is better than a DRM system. See:

https://audius.org/developers https://opensea.io/blog/announcements/opensea-raises-2-milli... https://eulerbeats.com/

You seem deeply confused. Making perfect digital copies is not something that is prevented by blockchains. Computers make perfect digital copies. If you want to prevent people from making perfect digital copies you have to get rid of computers, and good luck with that!

You seem confused. Blockchains and crypto created the concept of digital scarcity 12 years ago. Its a $1.8 Trillion dollar industry and counting. It's going to eat traditional finance.

You can't copy a Bitcoin. And you can't copy an NFT.

https://coinmarketcap.com/ https://defipulse.com/

But the NFT is not the art itself.

Okay, good luck.

Pardon my ignorance re: NFT's, but does anyone verify the status of the person creating the NFT as the owner/creator of the digital art/item in question?

Marketplaces like OpenSeas, Nifty Gateway, Rarible, and Zora do work to verify known artists. But not all artists have a reputation, so surely there is risk among some of the NFTs out there. However, the price for unverified NFTs from unknown artists is usually reflective of that risk.

So... at the end of the day, it’s still centralized?

And if somewhere down that chain someone sells the real artwork to one person and the NFT to someone else? who owns the 'real' artwork - the guy with it on their wall, or the guy with the bits?

This seems no different from a fungible document in that regard. The trust is still with a verifying third party.

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.

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”.

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?

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

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.

By that logic you should buy into every Ponzi scheme and speculative bubble you can find.