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Comment by jonathan_oberg | Hacker News Reader

Consider an NFT with smart contract which apportions a percent of each future purchase to the original seller.

Now consider a stock issued by a company as the NFT.

With traditional stocks, the issuing company only obtains funds one time. All future value gains are captured by traders.

Finally, consider issuing stock that as NFT with the contract above.

In this model, as a stock rises in value, both the company and traders gain.

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Is anyone doing this for real? It doesn’t seem like it adds any value over a real contract since it’s still relying on the courts for enforcement, and it seems unproven that there’s much demand.

Adding a blockchain also adds a number of complexities which would lower the value: you need to hedge against bugs in the smart contract (the Ethereum folks probably won’t rewrite history again for you), there’s a complex and expensive tech stack you need to support instead of a sheet of paper, and you have limited your potential buyers to those comfortable with that and on your particular system rather than another one.

It doesn't rely on the courts for enforcement, it relies on the underlying crypto-network. The contract is built in to the original sale.

Think about this beyond the sales pitch: I accept your offer, taking a lower price because you double pinkie swear that you’ll share part of any future sales of an object, profits from a company, etc.

At every point, you (the person who controls the thing with actual value) can choose to simply ignore the blockchain in many ways: not sharing profits with shareholders, selling a real-world object outside of the same blockchain, making copies of a digital object or listing the same thing on many NFTs, using a smart contract with a bug or unreliable oracle which you can exploit, etc. My recourse is my ability to sue you for breach of contract.

People really are writing tokens with custom transfer functions that do this sort of thing. The main use case seems to be allowing artists to collect fees on non-first sales of an NFT. This whole genre of program is a bit suspect to me though, because if you had a trusted counterparty or an escrow you could just sell them the private key for the account containing the NFT, and they could conduct a "sale" for $1 to their own wallet.

That is what I meant by the value being enforced by the courts: the artist could cheat me by selling my “exclusive” purchase again or in different locations, I could cheat them by making copies elsewhere or hiding part of the transaction, etc. and in each case the remedy is a court case just as with a normal contract making the same claim — the difference is that I don’t need to pay to maintain an expensive IT operation as well.

There will never be a real secondary market for NFTs.

How are people going to re-sell an NFT when its metadata points to a file that 404s.

NFTs that point to particular IPFS proxies or that point to IPFS files that nobody pins are not a great start. There are technical solutions to this problem, like using Arweave instead.

Overall I don't really like or care about NFTs.

The company can buy its own stock and benefit if it rises in value. There is nothing to gain from using a smart contract to achieve the same result except in a more convoluted, less transparent fashion.

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