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Comment by friendzis | Hacker News Reader

NFTs do not solve a problem, period.

This has been said time and time again about each and every "blockchain/defi" project for the past 10+ years: all the guarantees of blockchain protocols are within the blockchain. The very moment you try to put literally anything relating to outside of blockchain all you have is extremely inefficient append-only database - nothing more, nothing less.

NFTs are datums with an URL. That is all there is to an NFT. It's not a receipt for art, it has absolutely nothing to do with an art in question. To translate it to business it is a receipt for an entry to the Louvre with a URL pointing to an image of Mona Lisa. It does not prove your ownership of Mona Lisa. Anyone can access said URL without the receipt. There can be unlimited number of different unique receipts with same/similar URLs to same/similar image on Mona Lisa.

It is merely an overly complicated way of transferring cryptotokens.

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The problem is that people don’t understand what NFTs are and talk about them with the idea that they are about representing digital art.

NFTs are about representing non-fungible digital assets.

For some reason, NFT art took off (which I don’t understand), but that wasn’t what NFTs were built for. NFTs can represent digital assets that exist fully on a blockchain and aren’t tied to off-chain assets. A digital ID, a in-game asset, a digital license, a ENS name, etc… are all NFTs and don’t need to reference any odd-chain URLs or images.

Can you explain what non-fungible digital assets are? Because the reason I think NFTs are a scam is that I think of digital assets as inherently fungible.

E.g. a digital concert ticket

What stops me from copying ticket data from the NFT and using it to enter the concert?

If the concert venue somehow checks ownership of private key associated with the NFT it means they are effectively using some form of identity verification and blockchain is really really bad for this purpose

You don't use the blockchain to verify ownership of a private key. You know the public key, and the owner of the private key can sign any message to prove that they indeed have the private key associated with that public key. This can be done completely offline.

Isn't a crypto wallet, literally a key pair, the purest form of identity verification? It's something you have (private key) and something you know (passphrase). No need for some central authority, no need for privacy concerns.

You are right on the latter point, a keypair itself is a pretty good method to verify pseudonymous identity.

However, we are talking about NFTs as tickets. Traditional ticketing relies on secrecy, or in other words possession of ticked-id grants entry. Data embedded in NFTs is (and has to be) public, therefore token auth model does not work, you must use challenge-response model. The very point here is that ticket data has to be linked with a keypair and provided at the moment of sale to be verified upon entry. Public key must be provided at moment of sale, blockchains are one way to store that link, private database of ticketing system is another. Blockchains bring their own disadvantages and the only advantage is trustless transfer.

In what scenario trustless pseudonymous transfer of a ticket is an advantage worth disadvantages of the blockchain.

The concert organizer acts is an inherent central authority. The whole problem is easily solvable with a QR code and a web API.

Using a trust-no-one arctic-melting decentralised layer on top of a thing that is inherently decided by a single real-world entity makes no sense whatsoever.

I think that the true value of NFTs will come from interoperability, where there is no central authority, and you can treat it as a sort of cross-platform standard for verifying ownership of digital assets. This doesn't really apply to concert tickets (except if someone grants some special privileges to people who went to a certain concert in some unrelated virtual space), but there are advantages to not centralising authority for certain things (say, domain name ownership, why should ICAAN control that).

What's the benefit of making those resellable? To encourage scalping?

NFTs can be created that are non-resellable, you just build that into the smart contract. Even if they were, you can see the full transaction history and decide to reject anyone but first owners

I think NFT's applied to art make only nominal sense. I myself had to come to the realization that NFT's are really just flexing for the rich, because as anyone realizes, right-click save-as is all you need to have the art too, just not the "key" or "ownership proof" to that art.

However when it comes to gameing, its a whole different story. Think of it more like a key to unlock something unique in the digital world.

Want to own some unique special edition sword with rare attributes in the Zelda-verse? Buy the NFT block chain address to it that says you and only you can have it. Want to own the penthouse apartment in the zucker-verse? Buy the NFT key that says only you have ownership rights. Want to be a unique character with unique pets in World-of-crypto-craft? Buy the NFT's to unlock these. Sell them if you get bored for more money, and the game developer gets a cut!

The gaming application scenarios are enormous. That's why crypto gaming will likely be huge and I myself have invested in it's foundations for the long term (Enjin, Seedify-fund, D-race, etc). It's one of the few applications that makes sense outside of rich snobs flexing.

"Only you have it. We definitely didn't copypaste the meshes and logic and sell it to somebody else because the idea of digital non-fungibility is a neat joke. We promise. BTW: when you buy this, our execs are buying Porsches and other things that are real. Cool, huh?"

This holds no water and the streak remains unbroken: nobody I've seen describe blockchain-fiddling with respect to games describes the process as anything that anyone who plays games wants. Nobody actually wants this except for the people who want to make everybody else play involuntarily into weird cryptocurrency schemes while the schemer still holds the bag.

Diablo could have individual uniques right now if they wanted and you could trade them if you wanted and nobody needs to burn a dumpster full of coal to do it. It is genuinely a social toxin and you should stop.

But how does the NFT actually help with that? Couldn't developers/companies just create copies of that item/asset and sell them as often as they want to? If they want to sell assets/items exactly once nothing is stopping them from doing so right now, they are the only ones who can actually enforce that anyways.

I'm no expert at all, but this is how see it from an outsider perspective.

With an NFT you can prove the ownership of X digital asset, that proof of ownership is what is non-fungible

In order for NFTs-art to make sense to me, artist must attest that "whoever owns that digital asset in the ______ (ethereum blockchain?) " has the artist's recognition of ownership, and is a big UX problem for artists to really prove that, which I believe it's "solved" by platforms like opensea attesting on behalf of artist

So in practice, your buying the recognition of opensea that you own X asset, which opensea claims that is approved by X artist (it's also claimed by the artist on social networks or alike). there's still a problem there if the relationship between artist and opensea will be intact in the future, I don't know if or how they try to solve it

So in practice, most of it could have been done with a centralized database, but that would be missing the point.

There surely are knowledgeable NFT-creators who knows what they are doing and they can provide the attestation by themselfs, without any intermediary party, and that's where things get interesting with NFTs, look for example in gaming, especially where assets are shared among multiple games (otherwise it still could have been done with a database), it's just all impractical for non crypto-savvy folks

NFT can't prove ownership of anything but itself. Anyone can make a new NFT for the same artwork/game-asset/bridge/moon-plot and claim they own it.

There isn't even a uniqueness check, so there's no limit to copying other people's NFTs.

It's like buying a copy of an artwork in a museum gift shop. Your print is yours, but there can be thousands of other copies and there can be printed more at any time. None of them are the original artwork anyway.

> and claim they own it.

But that claim means nothing if the in-game asset is not recognized in the game, and that copied artwork is for some crazy reason not recognized by other interested parties as the actual original NFT. None of them are the original NFT, minted by the creator.

NFTs are completely useless for this. Why would game use blockchain to store ownership of an item? There are exactly 0 benefits to doing that instead just tracking it on their won servers in old normal database. Since anyone can create duplicate NFTs they would have to track which ones are genuine which defeats the whole purpose.

You cannot create duplicate NFTs. That is the whole point. The reason to have NFTs (and also fungible tokens) in games is that the gamers would know and be able to trust that the quantity of a given item was fixed. There may be more appeal to play a game where the economy was predictable and couldn't be later manipulated by the company or original game creators.

But the game developers own the database, so if they want something to be unique, they can already do that!

None of this are either actual problems that developers have, or things that users want. Never once has someone playing a game say "boy I sure wish all these hats were more expensive!"

The developers cannot make something trustlessly unique. If they control the database it is a simple query to up the count to 2!

NFTs neither do nor can enforce uniqueness too. Blockchain is a method to, as you put it, trustlessly couple a particular instance of a datum with a keypair. Game developers can duplicate the blob describing in-game asset in their own database or on the blockchain. For off-chain data blockchains are nothing more than a datastore which provides immutable link between a datum and a keypair.

So yes there is an original keypair that establishes the data. But ones established it can be fixed in a verifiable way. A game client, community of art lovers, government agency, social consensus, then recognizes that nft as corresponding to some offchain asset. It cannot be later changed, duplicated, etc without some social consensus to do so. You don't need to trust a third party with control.

Game developers can mint more tokens at any time. There's nothing technical ensuring scarcity of NFTs, and gentleman's agreements don't need a blockchain.

For game assets the game is necessarily the central trusted authority. Ethereum has a speed of C64 and latency of a postal pigeon, so you can't run a game server on the chain. Therefore, you have to trust an off-chain game to actually honor what the blockchain says. This is not substantially different than Steam CS:Go skins, except for industrial-scale coal-rolling.

> Game developers can mint more tokens at any time.

That's a very valid criticism of most game implementations (maybe all? I only know like 3 and they are all centralized blockchains -- puke), and that's why I'm staying away from them too, at least for now.

But I cannot deny there's real potential here, I can imagine totally open source games without servers, just p2p connection for battles (like we used to do to play Age of empires) and its assets backed by NFTs

As has been said, how does the game engine enforce ownership of those assets? The best it can do is query a blockchain (and for p2p games without central server every client must also become a node in all backing blockchains) and check ownership of corresponding private key[s]. There is absolutely nothing stopping you from minting a new NFT describing in-game assets, therefore the *content* of NFT must be signed by players in a match or some other external entity, but the blockchain makes no guarantees about the content.

Most of the blockchain properties only apply to on-chain assets. The very moment you involve an off-chain party, blockchain becomes append-only database with performance of table top calculator and latency of postal pigeon and is therefore a shitty database.

The only valid use case I see is a smart contract that automatically issues certain assets, which could be seen as somewhat of a solution searching for a problem, but games are not the problem. With games all clients must agree on game state anyway, storing game state on the blockchain is too expensive/cumbersome and if you have to agree on game state anyway, the state can also include assets.

The game client reads only canonical game assets - you can't just add any nft willy nilly.

An nft can also include a hash of some offchain data. In this way it can make a verifiable claim about content.

The "content" doesn't matter, all that matters is the NFT id (or hash, whatever is used to uniquely identify it). The game is what players have to coordinate about, make sure is the same one, and the exact same version of it. Because the code is the only thing that gives real meaning (the content) to that NFT. The blockchain is ONLY used to track ownership of and id (The NFT) nothing else is required.

I mostly agree on everything else you said as the current state of NFT-games. But unlike you, I do see potential for different kinds of games and dynamics that are not possible or impractical in database-games. I don't think they will be the same type of games we are used to, if you kill it now, we will never see into what it evolves.

If done well, it could prove to me that I could trade the asset at my will, without the game's platform blessing.

I know people that play games to sell their gold for real money, against the platform blessing, risking getting banned.

I also imagine that generating a market for real money in a game is a legal PITA for game developers, and NFTs frees developers from any liability since they are not in charge of its trading, transactions are not in their database anymore and they have no power over them

Also the same NFT can be used in different games, no need to change anything from game developers, just reuse NFTs. On the other hand, in the database world of games, it requires specific integrations with a centralized database

> I know people that play games to sell their gold for real money, against the platform blessing, risking getting banned.

Why would game developers ever implement a system that lets you circumvent the rules?

> Also the same NFT can be used in different games, no need to change anything from game developers, just reuse NFTs.

What? They still have to write code to interpret the NFT in their game. They still need specific integrations for every single token they need to support, and they also control what that token is. If they choose to interpret your really expensive sword as a common one, well, tough luck.

This is just centralisation -- entirely.

> NFT can't prove ownership of anything but itself

That's why the artist has to publicly attest which NFTs he approves

> There isn't even a uniqueness check

Even if there were, it wouldn't change anything, it's too easy to change one bit, or the metadata, and voilá, a new totally different digital asset that looks exactly the same to the naked eye

Again, none of these work without the artist approval of the NFT itself, that's the only thing that adds value to it

> For some reason, NFT art took off (which I don’t understand)

Status and money laundering, so no different to regular art sales.

For digital underlying assets, what is the social value of imposing scarcity? For non-digital underlying assets, what is it that ensures the link between the NFT and the asset?

> A digital ID, a in-game asset, a digital license, a ENS name, etc…

These are literally things tied to off-chain assets. Your "ownership" of any of those things only matters if someone else cares about the particular block chain it lives on.

If you "own" a game asset on blockchain A and I only care about blockchain B, as far as I'm concerned you don't "own" anything.

There's nothing stopping anyone from starting yet another blockchain and reselling all NFTs on that new chain.

Besides, unless a URL a token "owns" lives on the blockchain it literally points to some off-chain resource. If that URL in any way becomes inaccessible the thing you "own" is meaningless.

A game that exists in two blockchains would offer a way to bridge assets between them, or succeeded by one that does.

In fact the opposite is starting to be true: assets from game A being usable in game B.

This only works if the developers choose to spend time implementing an import/export system. That’s a lot of work and since they need to have an arrangement for that anyway, why wouldn’t they use their existing billing system to retain control of it and a greater share of the profits?

Again, assets on a blockchain only matter if someone cares about that blockchain. If I only support blockchain B, it doesn't matter how many assets you have on blockchain A as I will never support it. If I'm invested in blockchain B there's little reason to add to my expenses to support other blockchains.

Even in the most practical terms, if I sell in game assets they're ones I made for my game. I know they work with my game. Why would I put in extra effort to import third party assets I don't make money on? If your assets are in a proprietary format I'd need to spend more money licensing some importer or build my own.

> a in-game asset, a digital license

Neither of these are good examples: the real value comes from the outside legal relationships. If you have an in-game asset, what matters is whether EA thinks you own it and you get what they choose to implement. Similarly, a Windows license key is valid to the extent that you have a legal agreement with Microsoft — if you transfer it and the license doesn’t cover that, the blockchain doesn’t mean anything. If they do allow transfers, you don’t need a blockchain since their SQL Server database is what matters and it does the job faster and so much cheaper.

Very few NFT concepts are different than this: the legal weight comes from the outside world and the cheaper alternatives are likely to win out once the VCs drop the subsidies and start trying to get money out of the system.

NFTs essentially are blobs of data on the blokchain. As soon as that data references anything off chain you need off-chain methods to sync data with a blockchain, at which point the blockchain becomes merely a datastore.

> A digital ID, a in-game asset, a digital license

All of which require off chain sync. For NFTs to have any meaning at all, the embedded data must be world readable. At which point that digital ID, in-game asset, license all are usable by anyone else. In order for that "ownership" to have any meaning at all it must be exclusive and therefore the service must check your identity one way or another, be it somehow checking that you actually own the private key corresponding to NFT, or using any other mutually agreed authentication method. If the service does not recognize the particular blockchain fork your NFT resides in your NFT is more than useless, because it does not prove absolutely anything to the service provider. Proving identity via blockchain is probably the most inefficient method known.

NFTs can only make viable statements about on-chain assets. As far as I am aware, there are no other on-chain assets than cryptotokens, therefore all NFTs do are provide a level of indirection to cryptotokens.

I haven't been following NFTs closely, but it seems to me that it would be much more interesting to use them not to create artificial scarcity out of digital goods (which seems to be all of the effort), but rather to track ownership of physical goods.

Like, a company could issue a bearer-bond where the owner wasn't the person who physically possessed the bond, but rather the owner of token XYZ.

So, reverse the pointer. Rather than the token claiming to "own" a good, have the good claimed to be "owned" by a specific token.

The thing that largely seems nonsensical to me about NFTs is that the underlying ownership is...not valuable. You don't "own" anything other than the token itself. If you were granted the rights of ownership of the digital good (for example, if a worldwide exclusive copyright license were assigned to the bearer of an NFT, then it would "own" something).

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