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Comment by palebluedot | Hacker News Reader

Here is one thing I have a hard time wrapping my head around, and how I think it is fundamentally different from something like a painting:

The thing that is "non-fungible" is the token, not the actual art. The underlying digital asset is actually fungible with copies of it. With a painting, there are prints and reproductions of the Mona Lisa, but they are all fundamentally different in some way - the exact brush stroke texture, etc.

NFTs have this feeling of valuing the receipt, not the art. As if I walked into a gift shop at The Louvre and bought a Mona Lisa slick poster print, but then valued the gift store receipt more than the more-or-less completely replaceable poster.

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It's like buying a piece of land. You don't physically take the land home, you just acquire new and specific rights depending on your legal jurisdiction. Are you buying the property, or just the deed to the property?

Acquiring the land makes you the legal owner of it, backed by the law of the country and its military. Owning the nft has no legal consequence at the moment. Who will enforce any right on your behalf?

Which rights? Legal rights that the artist wants to sell alongside the token can be legally enforced. Beyond that, the ownership of the token is enforced by the blockchain, and that ownership token is the thing people value.

From what I gather a blockchain doesn't enforce anything. It simply states who owns what. Anybody can create a blockchain and own the world's entire supply of gold according to that blockchain. But can they enforce that ownership? No, they can't.

It doesn’t even do that. You can easily have one unique NFT claiming it represents ownership of the Mona Lisa, and another, unique and distinct NFT, also claiming ownership of the Mona Lisa. Besides ownership being unenforced, uniqueness is also unenforced.

But that's not how NFTs are being used now. For one, who would issue the Mona Lisa NFT, the Louvre, or Leonardo's family, or the family of his patron at the time? An NFT can't clear up a murky issue anymore than me writing you a paper receipt would.

But, a paper receipt is all that differentiates print #1 from #1005, and #1 is usually more prestigious. And even if those prints came off the machine in the other order, the actual artist is still attaching significance to one of them over the others.

NFTs are a way of saying that my identical print (file) is really the special one. Or that I'm special for having it. Or whatever.

It’s just like you having a paper receipt with #1 on it, and me also having a receipt with #1 on it. Both can be on the same blockchain at the same time, issued by different NFT ‘creators’. Or maybe on different blockchain... Which one is the ‘real’ one? No-one can say.

Do you not crypto? It's clear which address mints an NFT, and that address can be provably linked to the party with the keys. And they can put that proof on their website. You do know your favorite artists website, right?

So yeah, by looking at both NFTs we can clearly determine which is authentic.

If they're supposed to be unique, as opposed to 'we both sponsored the same art', then there are easy ways to ensure that.

For this reason, blockchains are not used that way - it does not track ownership of physical objects, it tracks ownerships of digital ones. If the blockchain says you own the only digital edition that Beeple created for his artwork, then this is so, because the blockchain states this.

If Beeple creates another NFT referring to the same work, then he is simply creating a second edition, in the same way that an artist can create a run of prints limited to 10, and later decide to create 10 further prints.

If someone else creates an NFT claiming to represent Beeples work, then this is like me selling my own unauthorized Robert Rauschenberg print, which I might find difficult to find a buyer for, though with enough talent, maybe not impossible.

In any case, the NFT is merely a digital equivalent of a print.

A digital equivalent of a print is an image file. The NFT has no real-world equivalent. Purportedly it "represents" the artwork, somehow, but in reality it's just a digital token with no connection whatsoever with the artwork.

> Legal rights that the artist wants to sell alongside the token can be legally enforced.

For the first sale. I'm not sure current contract law permits any legal rights to follow the token in subsequent sales.

Contract law can require you to hop on one foot.

But what rights would you need to go to court for? The point of an NFT is that the provided rights are exercisable without further permission.

Also, if the author wanted to control the NFT they'd just code it that way, for instance to prevent sales, or prevent more than one sale per decade, etc.

Sure, but the subsequent buyer of the NFT is (potentially/likely) not a party to any contract.

Sure they are, the original contract was that the blockchain asset was authoritative. If you buy that asset then you obviously share that view. If the asset has limited transferability, well you agreed to that. It was in the code for you to test for, if not read.

Engaging with a smart contract is not an action that binds you to a legal contract.

Nothing about the first sale contract can be legally binding on the person who buys the NFT when resold.

You can end up with an NFT without having been party to any legal agreement whatsoever.

No, but purchasing it effectively will. If I create a software-license rental NFT which you have to refill periodically, you won't be able to force me to provide full coverage to that software. Even if you purchased it from someone else without being told the rules - the NFT encodes them and you'd be expected to read it and know the limitations on your claim.

If I minted an NFT that said for every period you paid you could collect royalties from my art then you would have a valid contractual claim after purchasing it, even if I didn't make the deal with you initially.

If you buy a second-hand concert-ticket NFT the requirements of attendance will still need to be met before you can use it.

> If I minted an NFT that said for every period you paid you could collect royalties from my art then you would have a valid contractual claim after purchasing it, even if I didn't make the deal with you initially.

I don't believe this statement to be accurate.

I don't think it's plausibly true now because of the complexity of that contract and the difficulty in expressing it, jurisdictional issues, etc.

But if all that was handled and it was considered binging between you and the first guy then I don't think the transferability would phase a court at all. The NFT by nature, being meant to be transferred, and with tools to prevent that where desired, would indicate intent.

Perhaps a better example would be me (the hypothetical creator of cryptokitties) selling a cryptokitty, with the obvious implication that I would not modify my game to invalidate said kitty. The final owner of the kitty, like yourself, could sue me for misrepresentation for selling a product I intended to disable. Perhaps for tortious interference.

If you have the deed to a piece of land that’s (usually, in stable-ish jurisdictions) backed by the police and ultimately, military, of the government. You can stand on it, build on it, possible mine it, and the cops will stop anyone from interfering.

Land can't be copied. Land is rivalrous. Digital art is not, in any meaningful way.

Try telling that to the MPAA.

No it's more like the opposite of buying land. Land is non-fungible, "digital art" is exceedingly fungible. A land deed is perhaps not fungible, but it is reproducible, unlike an NFT.

I heard the bozos on the A16Z podcast (I think it was) compare NFTs to land deeds, but they very seldom know what they're talking about.

I have no idea what A16Z is.

The point is not that land is somehow fungible, but that we have plenty of precedent for "owning" a thing without taking physical transfer of that thing.

When you buy land you gain a right to physically use (or charge others to physically use) the land you didn't previously have. Exceptions include the Brooklyn Bridge scam, where you actually gain no control over the use of the land whatsoever, no matter how verifiably unique the vendor promises the token they're giving you as proof is, and the people selling certificates with parts of the moon and your name on it. A token which grants you legal control of distribution of a piece of digital art so you can charge others to look at or listen to it might be like a real land deed, but a token giving you a nominal association with something already in the public domain is much more like the latter examples.

Of course, but I don't understand the issue here. Everyone involved knows that, and buyers don't care. What's the problem?

The problem is that supposedly knowledgeable people hype the concept as something new and clever, they claim it solves a real problem.

I don’t feel sorry at all for the clown that paid 69 mill for the url to a jpg, I just think the hype is stupid. Not that we can be sure the buyer was real and distinct from the seller.

Yes, and the point is that this is not what art NFTs do at all.

PS It would have been quicker to google A16Z than type out those words, but I’ll save you some time by telling you that it’s (the podcast of) a top three silicon valley VC.

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