Hacker News Reader

You're correct. NFTs are unenforceable certificates of ownership for publicly available digital assets (at least as they are used currently). It's possible to make NFTs that connect to real world activities like tickets for concerts and whatnot but no one has done that yet or at least I haven't heard of it yet.

Curious how nfts are any different from qr codes in some ways.

They're not. The difference is that if the QR code was public and associated with some specific public key then it would be exactly like an NFT. The blockchain enthusiasts are confused about the economic and cryptographic aspects, they're orthogonal concerns.

Dirtybird Flight Club is a new (Oct 2021) NFT project, backed by the Dirtybird record label, that has held multiple free DJ events exclusively for NFT holders. So yes they connect to real world activities, and yes they are enforceable.

What exactly is being enforced?

Don't own an NFT, can't attend the show.

How does the NFT ensure you can attend the show? Surely the bouncer can just tell you you're not getting in, or let in the DJs friends?

How does a bank ensure you can withdraw your money? Surely the teller can just raid your account and give your cash to his/her friends.

I don't think anything can 100% prevent illegal activity, but eventually someone who abuses their power will get caught and be removed.

The teller has a camera over his/her shoulder, and [at least here] to extract the money you must go with your credit card and type a PIN, so the computer can verify it's you.

Banks hate competition, so they ensure the teller is not stealing money from the client.

Bouncers are watched by cameras too. And if they don't allow in legitimate ticket holders (unless incapacitated, abusive, etc), they get removed from the job. The owner of the nightclub can't risk his business being sued, or fined, or losing business from event promoters who receive multiple complaints of denied entry at that specific venue.

The credit card/PIN combo sounds great until someone walks into the bank and says their wallet was stolen, or even, that you died last week and presents a forged death certificate. The point is every system has a failure point if someone is determined enough. NFTs can prove digital presence in a specific wallet, they can't actually prove who owns the wallet. No crypto asset can do that, which is why many people have gotten tricked into giving up their private key or recovery phrase.

Here in Argentina, if you go to the bank and claim your wallet was stolen, they will not give you the money. IIRC you must call the bank, and they will send a week later a replacement of your card, and another day a new PIN written in paper that you must change in a ATM, so the thief must intercept both. Anyway, the PIN for the ATM is different of the PIN for the teller, so it's not so easy. And the teller will ask also for the national ID card, that is also difficult to forge.

In case of death, the bank ask for some papers signed by a judge that says you are the official heir, and they will check in the national death registry. No way they will believe in a piece of paper.

I don't claim it's impossible, but in both cases there is a lot of paperwork to ensure it's difficult.

I think the posters you're responding to are asking the following: what does an NFT provide here that any other identifier doesn't? They could just say you need to have an ID with your name on it. Is the point that would not be private? And so they could fix that by just sending you a long random string and forcing you to show that? But then is the issue in that case that that string could get duplicated multiple times and so if you had an NFT you could essentially guarantee that this private identifier is simultaneously transferable, but still effectively unique?

These are legitimate questions and I'm just trying to understand.

The OP said NFTs were "unenforceable", I disagreed. That was the extent of it -- I didn't claim they do anything another identifier can't. A physical ticket is enforceable, isn't it?

The location of the NFTs (what wallets they reside in) is public knowledge on the blockchain. The enforcement part comes by proving you are the owner of one of those wallets. Can someone steal your ID, or your phone with a wallet on it, sure, but as I said earlier, nothing is 100% resistant to illegal activity.

I'm pretty sure that the OP didn't mean literally unenforceable, but more that an NFT is no more enforceable than any other mechanism. In the end someone has to stand there and verify it and make a decision. They could use any number of methods that (may) be equally as good. In other words, why would one choose NFTs over any other method?

Anyway I don't want to get into that. I would still appreciate answers to my questions (here: https://news.ycombinator.com/item?id=29363960 ) in case someone here is feeling charitable.

Maybe the simplest way to explain NFTs is to compare them to casino chips: "if you have a casino chip and that casino goes out of business, your chip will most likely be worthless"

Say you take 10 grand to Bob's Casino in Las Vegas, buy chips and turn them into 100 grand at blackjack. You put the chips in your bag and go home to sleep because you're pretty drunk. Bob's Casino burns down overnight and Bob announces it he now bankrupt and going out of business. Your 100 grand in chips are now worthless.

The top answer for "are casino chips legal tender?" on Google is Because casino chips are not legal tender, they are not legally transferable. That doesn't mean some people don't try to exchange them for cash or chips at rival casinos. Although the practice was once popular in Las Vegas, the government stepped in to prevent money laundering and counterfeiting.

The U.S. dollar is the global reserve currency because it is backed by the full faith and credit of the U.S. Government and people have confidence the U.S. will last. Bob's Casino chips are back by Bob.

NFT's are backed by who?

Who is the Mona Lisa "backed by"?

Comparison to casinos makes sense. Currently cryptocurrencies are mostly used for speculation (basically gambling) and money laundering. There is no real economic activity happening on blockchains.

Define "real economic behavior".

I don't see it as any different than buying and selling stock, unless you also consider that to not be real economic behavior.

There's also loans and interest earning activities.

Speculation is not real economic activity. There are no actual goods produced and exchanged in the process.

According to the current IRS definition of cryptocurrencies, that people filing taxes have to "check off," frequent flier miles, grocery store coupons, and even the venerable blue chip stamp books, are crypto.

I understand and agree that a lot of cryptoscams dominate headlines, but there, but most money laundering, terrorist and drug financing worldwide is in USD $100 bills. Crypto is a rounding error.

As the de facto exchange currency of the world I agree that dollars finance crimes.

The NFL is doing this

https://www.ticketmaster.com/promo/wpbgpv

I can't access the site. I get the following message: You don't have permission to access /promo/wpbgpv on this server.

Weird, here's a screenshot to the text on the page (they disable copy/paste so I couldn't just include it originally)

https://imgur.com/a/8HZtpyp

Are people buying them?

People are buying tickets to the event, the NFT is not (currently?) sold standalone, but I guess you could say people are buying them?

It's a neat idea, but I'm not sure what the point of block chain does for anyone here. Am I ever going to sell my commemorative virtual NFL ticket? To who? Everyone who was at the game got one. No one who didn't attend the game would want it.

Because at that point you can simply issue a ticket.

The problem with NFTs is that they often don't have good provenance, and so are ripe for fraud.

Suppose we have a well-known photo of the Brooklyn Bridge. It was scanned twice and separate NFTs were created and sold. The data & hash is different because the scanner had different dust patterns on the glass each time. But visually - it's the same photo. And they were sold with the promise that they were unique in the world. Which is technically true (the math proves it), but a reasonable person would not think so.

A legit source like the NYC Museum of Modern Art would be trusted to sell NFTs that are unique and collectible. However "Bob's online NFT Shop" has a really nice website & sales brochure and so far has relied on his Terms of Use to quash any rumors of selling dupes.

I don't think it matters whether the source is legit or not.

People have to ask themselves why they are buying an NFT.

If they are buying it because they have a genuine interest in owning the NFT then they might want to make sure what they are purchasing is "authentic". Which I imagine in this case means there isn't, and won't be, an NFT that has more claim to being "authentic".

The more popular case for buying an NFT, I imagine, is for its value. Whether that be to sell it for more or simply to own something of value. In this case authenticity doesn't really matter. Two years from now it is entirely possible that MOMA's NFTs are entirely worthless. Everything with a brand is going to be trying to sell an NFT.

Consider trading cards based on 90's cartoons. Both Pokemon and Dragon Ball were popular cartoons. Only Pokemon cards cards though still have any value, to my knowledge.

More than trying to recognize whether the source is legit people have to understand the NFT culture. "Bob's online NFT Shop"'s Starry Night NFT might be worth millions in the future while MOMA's version is worthless. The value isn't really about authenticity. Both could be entirely forgotten tomorrow as it turns out that people don't care about art NFT and it turns out that COVID variant NFTs are the thing that has staying power.

> Two years from now it is entirely possible that MOMA's NFTs are entirely worthless

I was trying to think of a good way to include this thought. The scenario I had in mind was that Bob turned out to be really good at keeping his servers running, while MOMA had a data center crash and bad backups, and so lost the way to prove their NFTs were issued by them. So Bob's became worth more because they were the only ones that were traceable to their origin.

> Both could be entirely forgotten tomorrow as it turns out that people don't care about art NFT and it turns out that COVID variant NFTs are the thing that has staying power.

NFTs turning into this decade's Beanie Babies is a real possibility.

https://en.wikipedia.org/wiki/Beanie_Babies#Collectibility

The problem with art is good provenance. NFTs specifically solves this issue. Provenance was a common word used by art collectors describing the issues with Art auctions during NFT.NYC. Noah Davis really opened my eyes to this topic, here's his speech at NFT.NYC https://www.youtube.com/watch?v=HeVZeXsRKhs

It would take a while to explain provenance in crypto space. It's largely based on credibility and ownership of addresses. Once credibility and address is established, it is a simple operation to prove the Bridge picture came from a specific artist. Things like ENS (Ethereum Name Service) are examples of deep support for provenance in Crypto.

In broad strokes it's accurate. The only difference is that back in the day the people selling moon acres could just sell the same moon acre multiple times, thus destroying the value anyone placed in their certificates. With NFTs, there is some public list that shows who owns which plots of the moon and if someone tries to double sell a moon plot, you can say "I'm not paying for that." But it doesn't confer any more property rights than the previous setup.

That said, NFTs are no more and no less irrational than buying the right to have your name slapped on anything else. Plenty of people will give money to have their name placed on a wing of a building or a park bench or what have you. NFTs allow you to have your name placed in a public ledger. If you value having your name in some specific public ledger, more power to you. But yeah if you wouldn't pay some random dude named Jim to declare you "Jim's Certified Owner of the Brooklyn Bridge" why would you pay him for "Jim's Brooklyn Bridge NFT"?

I wish the game was something more productive like purchasing the rights to individual trees in the Amazon. I'd like to say "I own 100 trees in the Amazon rain forest and I'm not selling to anyone who wants to cut them down." But I could sell the rights if I needed the cash. At least I could feel like I wasn't wasting my time with fantasy investments.

There's plenty of organizations that do this. An interesting approach was someone selling land with a tree in Scotland, and once you buy it, you get a certificate that you're now a Scottish Lord.

"That said, NFTs are no more and no less irrational than buying the right to have your name slapped on anything else. Plenty of people will give money to have their name placed on a wing of a building or a park bench or what have you"

This nails it. People have been carving their names into historical monuments for centuries, or at least putting locks with their names on bridges.

The Dutch Tulip craze seems the most relevant example, but at least somewhere at the bottom of all the financialization in that case, there were some actual tulip bulbs that could be planted to yield flowers.

Same thing with physical art - even if it lacks monetary value, you still have something beautiful that you can hang on your wall.

A physical painting could also have attractive qualities (texture/depth, color, reflectivity/diffusion/sparkle, etc.) that a flat print might not have. (On the other hand, a print might correct some deficiencies in the original such as damage, cracks, or fading.)

> Am I wrong?

For trying to explain NFTs to your family? Probably. If your family trusts you with technology, the best way to actually talk about it would be implicitly imparting your opinion as a passing topic. Something like "you hear about those chumps spending real life money on randomly-generated pixel art?" If they show interest, chase it down and indulge their curiosity. If they don't really care, cauterize the topic with a joke or a banal comment like "I didn't know the public could get any dumber!" In any case, I'd bet the last thing anyone wants to do is launch into a blockchain-based seminar when they really just want you to pass the mashed potatoes.

I guess I have a weird family. My ex wife was there. She is a programmer who I consider a mathematical genius. I am a programmer. Our son was there. He rebelled by not caring about anything tech. My mother and father are pretty smart. They were all curious about it because of the buzz, so I did my best to explain it. I'm pretty sure they grokked it, especially the part about Bitcoin being attractive because the government can't devalue it by printing more. My ex has a relative working in New York City as a hedge fund manager, so I asked her to ask him to get a second opinion.

When you say "the government can't devalue it by printing more," that shows a pretty shallow understanding of economics. Are you thinking there's only so much gold owned by the government, and each printed dollar represents a share of that gold? That hasn't been true for a long time. Are you thinking there's only so much money in the world, so we should never print more since that dilutes the pool? That's not correct either. Economics isn't an easy subject, and I'm far from knowledgeable about it myself, but I do know that the sound bites favored by TV personalities are all about pushing political agendas, and not at all related to actual, you know, truth.

I'm aware that we are not on the gold standard. I'm also aware that money supply is a number that is closely tracked. I'm also aware that countries get in trouble when they try to print new money to get out of a crisis. That's about the extent of my understanding.

Pretty fun-sounding family! Must have been a fascinating conversation.

> The operative phrase is "There is no legal framework,"

This isn’t really the salient point. You can buy and sell useful things with no legal framework (and people do all the time) and that doesn’t make it a scam or a scheme designed to sucker people. The difference is that NFTs have no inherent, tangible value. In that sense it’s more akin to something like baseball cards, or art. Things that have no inherent value, and are easily reproduced, but can be verified to be “authentic”.

That's true. I've started coming around to that and thinking it's a lot like the art business, especially if you look at an artist like Andy Warhol who stamped out his works on something akin to an assembly line and left an estate estimated to worth $220 million. Art is worth what someone is willing to pay for it. I guess NFTs are the latest manifestation of that world. Perhaps some like the margins of the art world and want to extend it with more features.

Edit: I get my knowledge of Andy Warhol from these three documentaries, which have some conflicting information but paint a picture of a man who wanted to make a lot of money.

Andy Warhol - The Complete Picture https://www.youtube.com/watch?v=KnhqRiJ4KH8

The Life of Andy Warhol https://www.youtube.com/watch?v=ZDIdjvezp2U

Andy Warhol Documentary Film https://www.youtube.com/watch?v=UQXpqQO4vaE

The art business is a game for rich people. I don't think I'll bother with because I can't compete at that level due to lack of funds.

NFTs are legal contracts with an assignable role of the beneficiary (generally to the owner of the NFT).

They are currently being used for digital proof of ownership to digital memorabilia, but in the future expected to be used for real things (like licensing rights, representation of a gym membership etc).

They are legal (unenforceable or not is not the point), as much as if you wrote on a piece of paper in college to your roommate that you agree to answer, everytime he calls you on the phone and asks "Who's your daddy", with "Jeremy", is legal.

When you are buying a tweet, you're essentially buying a digital memorabilia. When you're buying Linkin Park's Mike Shinoda's doodles, you're buying digital patronage (as in, Mike Shinoda will always acknowledge the owner of the NFT as the patron of his doodle).

It's a lot of complicated technology backing unique digital trading cards. The difference between NTFs and bitcoin is bitcoin is (mostly) fungible.

In Palm Springs, California I have no problem paying with casino chips from the native owned Spa Resort. Most businesses are on native land. :)

The value of the NFT (EIP-721) standard is not the currency you may or may not extract from the representation (picture) of the code on the network.

The value is that it allows for ownership of a specific asset that cannot be argued against. It is immediately accessible, communicable, and you can verify ownership of said asset.

Instead of making nfts for land on the moon, replace the asset with property deeds. And replace/automate whatever you can cost efficiently in the property deeds process and infrastructure with blockchain.

I recently wrote a short article about NFTs, how they work and how to get started. Might be of some interest to your family: https://medium.com/@contact_9164/how-to-create-your-first-nf...

Good article, marketing tool or not.

You probably shouldn't try to explain things to your family until you understand them yourself.

I think we have to try or we're letting our people down

From an excerpt of the book published in a 1996 issue of Caltech’s Engineering & Science magazine:

Feynman was a truly great teacher. He prided himself on being able to devise ways to explain even the most profound ideas to beginning students. Once, I said to him, “Dick, explain to me, so that I can understand it, why spin one-half particles obey Fermi-Dirac statistics.” Sizing up his audience perfectly, Feynman said, “I’ll prepare a freshman lecture on it.” But he came back a few days later to say, “I couldn’t do it. I couldn’t reduce it to the freshman level. That means we don’t really understand it.”

John Gruber writes the simple explanations are the goal at Apple as well:

Engineers are expected to be able to explain a complex technology or product in simple, easily-understood terms not because the executive needs it explained simply to understand it, but as proof that the engineer understands it completely.

https://kottke.org/17/06/if-you-cant-explain-something-in-si...

You can never really be sure you actually understand something. Trying to explain it to others is just about the best possible way to probe your understanding.

You're wrong. Look at the history of digital gaming and people trading in game items for real money. Look at the whole swath of digital art, music, nba game moments, etc that could not be certified and now can be. Look at how major game studios were silent about NFTs and now all announced in their recent earnings reports that they are at least investigating blockchain and NFT and soon incorporating them into their futures. If you do any bit of shallow research, you'll stumble into several multi billion and soon to be multi trillion dollar market cap plays.

Look back at this comment in five years.

I said The operative phrase is "There is no legal framework"

Are you telling me there is a legal framework so NFT ownership is enforceable? Or are you saying it's a game people have agreed to play? Edit: I didn't say you couldn't have an operative market.

In-game items aren’t being sold as “investments” and they’re typically non-transferable. They are not advertised as items that will appreciate in value and the purpose of the items isn’t to make money. And 99% of the time you don’t even own the items at all but instead have bought a license to use a design under terms stipulated by the video game company.

I don’t think video games have very much use for NFTs. Valve games (TF2, CS:GO) have a thriving 3rd party cosmetic market based on trading, and Valve even takes a cut for e.g. the Steam community market. This did not need NFTs to implement. I don’t see why a game dev would go through the trouble of establishing a distributed model of ownership, especially for multiplayer games, which already have the centralisation of game servers, or game server discovery servers. Also, it gives them less control of the ecosystem.

Ask HN: Trying to explain NFTs to family on Thanksgiving – am I wrong?