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Comment by Sohcahtoa82 | Hacker News Reader

NFTs don't necessarily represent ownership of the underlying asset.

They're like minting a commemorative coin celebrating the asset, and only minting a single coin. The coin does not represent ownership of the asset. It's just...a coin. A token. Supposedly, the uniqueness gives it value, but if I decide to record a single fart, that fart is unique, but the uniqueness does not inherently create value.

An NFT for the Mona Lisa caries no benefits or rights, other than saying "I own the NFT for the Mona Lisa". It's inherently worthless, with a supposed value being created from absolutely nothing.

Anyone buying NFTs either doesn't know what they're actually paying for, or thinks they're going to be able to find a greater fool who will eventually be willing to pay more.

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> An NFT for the Mona Lisa caries no benefits or rights, other than saying "I own the NFT for the Mona Lisa".

It's not even “the NFT” — anyone can create a new NFT for the same image on a different blockchain or make a 1 pixel modification and create a new NFT for something visually indistinguishable. You could imagine an art museum making something potentially harder to clone but at that point it's like a donor buying a new frame or putting a bench in front of it, and they don't have a reason to give money to the blockchain grifters when the only value comes from the reputation of a single trusted party.

> Anyone buying NFTs either doesn't know what they're actually paying for, or thinks they're going to be able to find a greater fool who will eventually be willing to pay more.

My assumption is that most of it is simply an attempt to make cryptocurrency look valuable. Nobody has a requirement to use it so they need people to think that an NFT is an investment to get new marks buying Ethereum. Sell it to your buddy, make sure every reporter in the world hears the transaction price in hard currency values, and either write that off as marketing cost or quietly have your buddy transfer the tokens back later minus a commission.

Right, and that's why the physical art analogy breaks down. Was just trying to come up with a slightly better physical art analogy. Copies are possible, forgeries are possible, and provenance is a real challenge. However with NFTs it all takes an abusive amount of electricity.

I like the idea of them being a commemorative coin. The analogy I've been using is that NFTs are like signatures. There may be a famous photo of Elvis that anyone can print, however, if someone had that photo printed and authentically signed by Elvis, it could be worth a lot more money, if people want to have the signature. If Elvis signed 500,000 of that same photo, the signature may not be worth much.

Perhaps in the future if NFTs get some sort of legal backing and therefore more enforced property rights, maybe it'll be different, however I think the analogy works well for now.

Thoughts?

> NFTs don't necessarily represent ownership of the underlying asset

They don’t ever.

That’s not true. If I owned the Mona Lisa what is stopping me from writing a legal contract “whoever owns this NFT is the legal owner of the Mona Lisa”?

Yes, it is true.

You can write that text all you like, but it wouldn’t be a legal contract.

Hint: Who is do you think is signing that contract, and who is going to enforce it?

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