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Comment by root_axis | Hacker News Reader

I'm not convinced.

People talk grand about "permissionless data" but I fail to see any practical applications. NFTs are a scam and are retroactively obsoleted by digital signatures. All of the ideas about logistics tracking, deed tracking, etc etc are all rendered pointless by the oracle problem, you can get identical guarantees with digital signatures minus the blockchain.

DeFi is DOA. Gas fees are insane, "layer 2" is just a diplomatic way of saying "offchain centralization", every DeFi scheme is a money loser relative to just buying eth and waiting for a pump, "collateralized" loans where you pay coin so someone will loan you coin is not a valuable use-case to the vast majority of the population...

None of this is about giving power back to individuals, it's all about making money on mining fees and cryptocurrency speculation.

View on HN

Largely agree with this. The big promise of defi was to “bank the unbanked”, but Eth is

- slow (15 txn/sec, 22-23 with the move to proof of stake) - expensive (I read somewhere that globally Eth users spend more on 30M USD in fees per day!) - too volatile to be reliable for everyday banking use cases - bad for the environment

Blockchain technology is interesting and very powerful, but VCs and founders have all too often put the cart before the horse. A few years ago I spoke to an Aussie tech entrepreneur who had raised funding for his “Airbnb for RV” platform. He didn’t get much attention until he said it was blockchain based. In 9.99 out of 10 cases there is no need for a blockchain when a trusted, centralised ledger will do just fine.

Edge cases I can think of where a blockchain makes sense is in cases such as post-trade activities or trade finance where multiple parties need to settle complex transactions in a distributed way (Contour is a good example of this). Disclaimer: I do not own shares in Contour; I just find it interesting.

>>- slow (15 txn/sec, 22-23 with the move to proof of stake) - expensive (I read somewhere that globally Eth users spend more on 30M USD in fees per day!) -

This is no longer the case with L2 solutions, like zk-Rollups. See what StarkEx, which is one particular Validium/zk-Rollup L2 solution, is doing:

https://twitter.com/EliBenSasson/status/1475206185762578437?...

>>Past week, @ethereum ~ 9M txs. StarkEx ~ 6.25M TWO THIRDS THE TX COUNT OF ETHEREUM.

L2 solutions can process transactions at scales and fees a couple orders of magnitude greater and lower than Ethereum L1, respectively.

>>too volatile to be reliable for everyday banking use cases

Stablecoins aren't volatile, and they are a major, and rapidly growing use case of Ethereum

>>bad for the environment

Ethereum's energy consumption declines by 99.95% upon the completion of the transition to Proof of Stake.

> Ethereum's energy consumption declines by 99.95% upon the completion of the transition to Proof of Stake.

Why do Ethereum fans keep using this example as if it’s already done, when it still isn’t?

It's an argument at the end of the day. 'We know it's bad now. But it's being worked on.'

Just like a Tesla investor might believe autonomous driving is being worked on.

We're talking about the long-term viability of something, so it makes sense to talk about how that something will look in the very near future.

The completion of Ethereum's transition to Proof of Stake will occur very soon, most likely within the year. The testnet for the merge - which is the term describing the technical process that completes the transition (it refers to the currently running Proof of Stake Beacon Chain being merged into the execution chain to allow Proof of Work to be turned off) - is already running:

https://blog.ethereum.org/2021/12/20/kintsugi-merge-testnet/

L2 solutions: yes they do indeed scale them, but it appears to be a centralised solution to a decentralised problem. In other words, putting lipstick on a pig.

Stablecoins aren’t volatile, correct, but that’s because they are pegged to an offchain fiat currency or other form of “real” collateral. Even DAI, which is the most “truly” decentralised stablecoins of them all, is pegged against fiat.

POS is good yes, but the Eth community have been saying this for a long time now. “Show me the money” ;)

>>L2 solutions: yes they do indeed scale them, but it appears to be a centralised solution to a decentralised problem. In other words, putting lipstick on a pig.

L2 block selection can be entirely decentralized. The first iterations are centralized because the software is extremely immature and having the block inclusion process centralized allows bugs to be more quickly and effectively dealt with. The major L2s all have decebtralization of coordinators in their roadmaps.

>>Stablecoins aren’t volatile, correct, but that’s because they are pegged to an offchain fiat currency or other form of “real” collateral. Even DAI, which is the most “truly” decentralised stablecoins of them all, is pegged against fiat.

Dai is pegged to the dollar, but can use entirely on-chain assets like ETH as collateral. Other stablecoins, like RAI, are not even pegged to any fiat currency, and use only on-chain assets for collateral.

>>POS is good yes, but the Eth community have been saying this for a long time now.

Progress has been made. On December 1st, 2020, the Proof of Stake Beacon Chain.

The Merge, which will complete the transition to the Beacon Chain, now has a testnet, launched on December 20th, 2021:

https://blog.ethereum.org/2021/12/20/kintsugi-merge-testnet/

The transition should be complete within a year. It can't be rushed, given the amount of financial value involved.

> Largely agree with this. The big promise of defi was to “bank the unbanked”

The un-banked aren't un-banked because there are no banks, or even because banks are inaccessible. They are un-banked because they do not have money. This is a social problem characterized by folks falling through the cracks. It's a lack of social safety net, a lack of unionization, a lack of inflation-adjusted minimum wage, a lack of healthcare. Broadly, a lack of of social programs.

I've never met a single person who had money but couldn't get a bank account* - have you? What good is a bank account to someone with no money anyways? What are they going to put into it? Just opening a bank account doesn't make you magically any less poor. You can grab one at ally.com free of charge right now with no minimum deposit. They'll even pay interest on your checking accounts which of course stablecoins will not unless you put them at massive risk.

Not to mention for the poor, a massively volatile speculative asset with astronomical fees is literally the worst thing they could put all their money into.

* outside people on the OFAC list, which, I would argue, is a good thing.

> I've never met a single person who had money but couldn't get a bank account* - have you?

I don't agree with defi but this is absolutely a problem in a lot of rural america. People with money, who get paid, but without a bank so they have to take their checks to gas stations who take huge fees.

That you haven't met someone like this isn't surprising at all.

Why can't they open an online checking account like Ally which will allow them to deposit a photo of their check free of charge? My understanding is a lot of low-income folks have smartphones as desktop replacements. Is this not a strictly better solution than anything in crypto?

I'm also open to postal banking as a solution to this problem, but I'm not really clear on where the system is actually currently failing folks who have money. Are they banned by ChexSystems or something?

I get it, "Bank the Unbanked!" is a compelling narrative, but folks seem not to be asking the relevant questions: (1) who are the unbanked exactly and (2) why aren't they banked - specifically - when there's a ton of banks out there, a bunch of which charge nothing.

Many banks, both historically and presently, have pervasive and capricious fees that disproportionately impact people with less money. Both because those fees are large relative to the amount of money they have, and because those fees arise in situations more likely to occur with less money (e.g. overdraft fees, policies that intentionally do withdrawals before deposits to cause overdraft fees, minimum balances, ATM fees, and many others).

And furthermore, the institutions more likely to be friendlier to customers with less money are sometimes also institutions on a smaller scale that may have a harder time offering some of the services of larger institutions (e.g. branch/ATM locations, compelling variety of credit and account instruments, investment arms, better online banking experiences).

To the extent this is changing, it also has to change in people's perceptions, in a fashion that makes it easier to predict and feel confident in.

> Why can't they open an online checking account like Ally which will allow them to deposit a photo of their check free of charge?

You have an incredible amount of optimism for both Ally's marketing department and also rural internet. Furthermore, this doesn't solve the cash problem unless you want to pay upwards of $5 just to pull out of an ATM.

> folks seem not to be asking the relevant questions

This is an incredibly well researched situation affecting a lot of americans. You not knowing isn't the same as this not being well understood.

This sounds like parts of the US has a problem with checks and a lack of good, digital bank services.

I can transfer money and pay my bills with my phone. I can even transfer money to people not having the same bank as I have. I did it today, it took 30s or so and the recipient could immediately see the money on her phone. Where I live we also tend to use cards a LOT. I can pay in almost any store with my debit card and the money is drawn from my bank account right away. It was decades since I've saw a check.

That's a long winded way of saying that you live in New York.

>>It's a lack of social safety net, a lack of unionization, a lack of inflation-adjusted minimum wage, a lack of healthcare. Broadly, a lack of of social programs.

Social spending has risen at unprecedented rates since the 1950s:

https://ourworldindata.org/grapher/social-spending-oecd-long...

If the social democratic narrative were true, we would have seen the rate of wage growth rise. The opposite has happened.

It turns out social democracy benefits only the public sector unions.

A couple anecdotes illuminates the kind of power these unions wield:

New York has nearly 300,000 unionized public sector employees receiving over $100,000 a year:

https://archive.md/JnJQY

In California, emergency workers can retire at 55 with 90% of their pension, that averages $108,000 per year.

California now has $1 trillion in pension obligations for its unionized public sector workers. That is where all the social welfare spending is going.

>>Not to mention for the poor, a massively volatile speculative asset with astronomical fees is literally the worst thing they could put all their money into.

No, the worst thing is lottery tickets:

https://www.theatlantic.com/business/archive/2012/03/amazing...

Tokens on the blockchain on the other hand provide hundreds of thousands of people in the Philippines with a way to make a living, and literally saved many from death during the mass-unemployment created by the lockdown. See the rise of Axie Infinity.

And there are plenty of crypto platforms that offer zero/near-zero fees, like Axie's Ronin, which is a near-zero-fee Ethereum sidechain.

>>outside people on the OFAC list, which, I would argue, is a good thing.

What about innocent people from countries on the OFAC list. Do you think that is a good thing? Acceptable collateral damage? What about WikiLeaks, which was blockaded by the credit card companies, under pressure from US government agencies, after it revealed war crimes? Good thing too?

You speak from a position of privilege, to reinforce centralized structures of control that perpetuate that privilege.

> Tokens on the blockchain on the other hand provide hundreds of thousands of people in the Philippines with a way to make a living, and literally saved many from death during the mass-unemployment created by the lockdown. See the rise of Axie Infinity.

It's clearly a Ponzi scheme, where new entrants pay a large entry fee ($1k+), which funds the returns of the existing players. Poor people borrowing money to fund other poor people, until the last to join are stuck with the bill (earnings are already crashing).

More details in:

- https://news.ycombinator.com/item?id=29725845

- https://twitter.com/larsiusprime/status/1459191090100244483

- https://ambcrypto.com/axie-infinity-ronin-blockchain-see-dec...

- https://www.reddit.com/r/AxieInfinity/comments/odmdrk/how_do...

It's not poor people funding Axie. It's whales, who pay poor people for the SLP tokens that their grinding earns them. It's the same economy that was once seen in World of Warcraft gold farming, but allowed to globalize and become streamlined, so that more gamer whales can connect to more people willing to work for them.

Beyond this enablement of more sophisticated coordination between those with capital and those with time, the emergence of digital collectibles might increase the aggregate amount of physical wealth, as the emergence of physical collectibles did some 30 some thousand years ago:

https://archive.fo/pvabs

> It's the same economy that was once seen in Warcraft gold farming, but allowed to globalize and become streamlined, so that more gamer whales can connect to more people willing to work for them.

You say that like its even close to a good thing. It's unproductive, a waste of time, resources, human capital. It's also a Ponzi scheme because all payouts are made from new investors minus operational costs. Gains are illusory in aggregate.

It's a transfer of wealth from those with surplus capital, who are looking to expend that capital on entertainment, to those on the brink of starvation, so yes it's a good thing. And no, if the transfer is done for entertainment purposes, as many game asset purchases are, it's not a "ponzi" scheme.

>>Gains are illusory in aggregate.

Gains might not be illusionary, given they are giving rise to new stores of wealth which can have economic utility. See the essay on the rise of physical collectibles 30 some thousand years ago.

> It's a transfer of wealth from those with surplus capital, who are looking to expend that capital on entertainment, to those on the brink of starvation, so yes it's a good thing.

I mean, you can make the same exact argument about any exploitation of poor people for entertainment purposes. Your description maps perfectly to Bumfights. I think most would agree that your description alone does not make an intrinsically good system, let alone a moral one.

> And no, if the transfer is done for entertainment purposes, as many game asset purchases are, it's not a "ponzi" scheme.

The rich folks are buying in to make a gain, not entertain themselves. They are 100% of liquidity. The system is unproductive and yields nothing of external economic value but purports an increased value over time via 'number go up' all while operators slowly bleed capital out of the system. This is a Ponzi scheme. Ask yourself, would it work if money weren't involved in any way?

> Gains might not be illusionary, given they are giving rise to new stores of wealth which can have economic utility.

Charles Ponzi and Bernie Madoff were just ahead of their time, apparently. Given sufficient mental gymnastics, they too could have been captains of industry. Bernie after all gave rise to a new store of value! Shares of Bernard L Madoff Investment Securities LLC with meaningful economic utility! You could even lend them to others to earn a yield via a brokerage, I suspect! Alas, time makes fools of us all.

>>I mean, you can make the same exact argument about any exploitation of poor people for entertainment purposes

Paying poor people, who are grateful for the opportunity to feed their family, is not exploitiation. People heeding your admonishments against 'exploitation' would lead to more suffering, and no party being better off. It's pure politicization of interactions, at the expense of actual real life humans.

>>The rich folks are buying in to make a gain, not entertain themselves

It's a game, with a competitive element, so obviously some proportion are playing for entertainment.

>>Charles Ponzi and Bernie Madoff were just ahead of their time, apparently. Given sufficient mental gymnastics, they too could have been captains of industry.

Your hyperbolic comparison, between a game with digital assets, and actual ponzi schemes, is immature.

And arguing that digital assets, which become far more durable forms of property when NFTized on blockchains, can find economic utility as a store of value, is a completely reasonable argument, and your extreme reaction to this, full of snark and hyperbole, suggests your stance on this is far too motivated by emotion and bias to assess it.

> Paying poor people, who are grateful for the opportunity to feed their family, is not exploitiation. People heeding your admonishments against 'exploitation' would lead to more suffering, and no party being better off. It's pure politicization of interactions, at the expense of actual real life humans.

I mean it depends on what you’re paying them to do and how much you’re paying them. Axie “players” now make on average less than minimum wage in the Philippines and continued earnings depends on more people buying into the ponzi.

> Your hyperbolic comparison, between a game with digital assets, and actual ponzi schemes, is immature.

The economics are clear and you haven’t really disputed them except by invoking the intangible magic of the blockchain and digital assets.

>>Axie “players” now make on average less than minimum wage in the Philippines and continued earnings depends on more people buying into the ponzi.

The minimum wage in the PH is zero, with millions unemployed, and many more than normal, due to lockdown restrictions.

Axie saved many lives, and if you were to put aside your agenda, and objectively study this, you'd find out how many people in the Philippines who were on the brink are grateful for the lifeline Axie provided them.

>>The economics are clear and you haven’t really disputed them except by invoking the intangible magic of the blockchain and digital assets.

Collectibles don't suddenly become "ponzi schemes" (!) when they become digital or are issued on blockchains. Your analogy is absurd, but I suppose that's ok, given the abundance of hyperbole on the pro-blockchain side.

I agree that the biggest problem poor people have is lack of money.

> I've never met a single person who had money but couldn't get a bank account...

This is an exhaustively documented problem.

There absolutely are banking deserts (riffing on the "food desert" phrase). Those pay day loan and 3rd party check cashing services exist (to exploit) those communities which don't have banks, credit unions.

I agree with your views in a country like the US where banks are widespread and people have Internet access. However in a country like Indonesia it’s quite different. Only 50% of the population have a bank account, and even if they have a bank account they might not have sufficient credit history to apply for a loan for their business or a home. Banking is much more than just a checking or savings account with a debit card. DeFi theoretically has a lot of potential to disrupt in these countries (as many people own a mobile phone), but it looks like it will be up to the horizontal platforms like Grab and Gojek.

> Banking is much more than just a checking or savings account with a debit card. DeFi theoretically has a lot of potential to disrupt in these countries (as many people own a mobile phone)

You dont need DeFi for that. See M-Pesa.

> None of this is about giving power back to individuals

Artificial scarcity is the aspect of web3 that bothers me most.

The web is all about abundance; reducing the marginal cost of software and information to zero so as many people as possible can have access. It seems like web3 advocates seek to do the opposite and lock software and information inside the digital equivalent of diamond mines.

I've asked for this many times (though not here) and still haven't received a satisfactory answer, so I'm curious: who said any of this? Is there a single influential architect of the net or the web who believed this or is this something that was and is a politically aspirational goal by special interest groups like the GNU folks?

One reference is “Free” by Chris Anderson, https://www.amazon.com/Free-Future-Radical-Chris-Anderson/dp...

DHH has written about abundance as part of his approach to Rails, https://world.hey.com/dhh/i-won-t-let-you-pay-me-for-my-open...

The “Post-scarcity economy” article on Wikipedia lists a number of references, https://en.m.wikipedia.org/wiki/Post-scarcity_economy

Generally, computing trends toward abundance. Computers are priced about the same, but do more each generation.

Right but none of these folks were associated with the origins of the net or the web at all. They're people who either inferred post-scarcity through trends they saw or wanted to apply an ideology to the net and the web. DHH is the only technical person in that list.

The reason this distinction is important is because a lot of folks try to make the case that the ideological origins of computer networking were with an eye toward post-scarcity, but this seems incorrect to me. Instead it seems to be ideological anger that the internet is not supporting post-scarcity economics.

Tim Berners-Lee, “The Many Meanings of Open”, https://www.w3.org/DesignIssues/Open.html

> “The World Wide Web turns 25 next year. We have come a long way, but we must all continue to push for these various forms of openness in the appropriate places. Only then can we ensure that the Web is for everyone.”

While his essay doesn’t use the words “abundance” or “post-scarcity”, it gets pretty close. My guess is that the guy who gave the Internet away for free probably approaches technology from an abundance perspective.

> “…but this seems incorrect to me.”

I’m curious what has led you to the opinion these people are wrong? I’m interested to know about histories of the web that reflect a philosophy of scarcity.

> While his essay doesn’t use the words “abundance” or “post-scarcity”, it gets pretty close. My guess is that the guy who gave the Internet away for free probably approaches technology from an abundance perspective.

Thanks for that essay. I actually didn't see anything that got close to post scarcity. The only point that seemed to touch on it was the point about Open Access but it seemed to be closely scoped to academic work.

> My guess is that the guy who gave the Internet away for free probably approaches technology from an abundance perspective.

Maybe? Giving things away for free doesn't lead to a post-scarcity mindset. Not every person that donated to charity or volunteers with their time thinks the world can get there either.

> I’m curious what has led you to the opinion these people are wrong? I’m interested to know about histories of the web that reflect a philosophy of scarcity.

It's hard because a "philosophy of scarcity" is pretty ill-defined. As early as 2016 [1] Berners-Lee was pushing the W3C to standardize web payments. And HTTP status code 402 Payment Required was in the HTTP spec since at least RFC 2068 [2] in 1997. So at least since then someone thought that the internet would be used to facilitate payment.

But that's enough uncertainty for me to comfortably say that the internet was not designed for (or even against) post scarcity in mind. Therefore there's no ideological connection between post-scarcity and the net or the web.

[1]: https://www.w3.org/blog/wpwg/2016/12/16/web-payments-tractio...

[2]: https://datatracker.ietf.org/doc/html/rfc2068

You’re making the argument that if the web has a payments API/protocol then the community building the web can’t simultaneously aspire toward a future of abundance. That doesn’t make sense.

Some items, like tickets to the World Cup, are scarce. A payments API/protocol allows scarce items to be sold online. Presence of the API/protocol doesn’t prevent simultaneous distribution of abundant items online, or imply creators of the web are anything but pragmatic. Even the Free Software Foundation is pragmatic about people charging a fee for GPL software (e.g. sell a DVD with the software), as long as the GPL licensed source code is included. FSF hopes you’ll give away the DVD, but understands if you choose not to.

It seems like the idea that people are working toward abundance really bothers you. How come?

> You’re making the argument that if the web has a payments API/protocol then the community building the web can’t simultaneously aspire toward a future of abundance. That doesn’t make sense.

Oh I'm not saying folks cannot aspire toward abundance. I'm only saying that the technology didn't have abundance in mind when creating the net or the web.

> It seems like the idea that people are working toward abundance really bothers you. How come?

I'm not against that at all. A lot of arguments against Blockchain technologies seem to be that "the web used to be about abundance and Blockchain tech is against that so it's against the idea of the web as a whole." It's an argument designed around a narrative of a rug pull (e.g. it used to be abundant and now it's not) as opposed to a more realistic narrative that "we wish to bring the web to an abundance state and Blockchain technologies don't share that wish" which is an accurate but much more mild claim. I just want it to be clear that there was no solid historical basis for abundance in computer networking so that activists do not change history for stronger claims and that such claims (for or against abundance mind you) are ideologically motivated.

Web3 has grown synonymous with blockchain. The things I really value in web3 are non-blockchain distributed systems. IPFS, Gun.js, heck, even BitTorrent could be considered web3. Most problems shouldn't be solved with blockchains. Crypto is what makes web3 artificially scarce.

I don't know about the others, but IPFS uses Filecoin, which is blockchain based.

This is not exact. Filecoin is built on the top of IPFS!

https://filecoin.io/build/

Yes, but IMHO, IPFS without Filecoin doesn't really innovate in any meaningful way over previous CAS/DHT based distributed filesystems (Freenet, Tahoe-LAFS, etc). Filecoin lets IPFS claim that they have at least tried to solve the freeloader problem and incentivized people to actually store strangers' encrypted data long term.

> NFTs are a scam and are retroactively obsoleted by digital signatures

I'm not one to ever defend NFTs, but this is not right. Suppose I bought an extremely trendy natural number k ∈ ℤ and I have a signature σ from its inventor that says "doomrobo owns k". Suppose in a year the trend has passed and I'd like to sell k. How do I transfer ownership to someone else? Clearly sending σ doesn't suffice, since σ is public. Do I need a new signature?

Ok different setup: σ is actually a signature from me and the inventor saying "the non-inventor pubkey that signed of this message is the owner of k". How do I transfer σ now? Do I send my signing secret key? Who makes sure I deleted my copy of the signing key?

Good questions.

Let's say I create a piece of digital art and create an NFT out of it. The NFT somehow starts increasing in value. Then I copy my original digital art-asset and perhaps use a Photo-Shop filter to make it have a different hue. I turn that into another NFT. And I keep on doing this for all colors of the rainbow.

What prevents me from creating new NFTs with the same or slightly modified underlying digital asset?

In many cases you don't even need to modify it. Ownership of an NFT often does not provide copyright on the original image (https://www.wipo.int/wipo_magazine/en/2021/04/article_0007.h... has some interesting details on what you do and don't get with an NFT). So if you made the original image, you can just mint a new NFT of that image and sell it.

Heck you can mint as many NFTs as you like of any image you own the copyright of :)

Why do I need to own the copyright to mint an NFT of the image?

So, if you don't own the copyright and then mint an NFT, in theory the copyright holder could get the source image for your NFT taken down (depending on where it's hosted of course)

That hasn't stopped loads of NFTs of copyrighted images being minted ofc.

It is worse than that, there are no pixels! The NFT is a short string, usually a URL. It’s effectively a QR code! You can create as many copies as you like. The “value” of an NFT comes in somehow convincing people you are the official one. This needs a lot of clout: e.g. a sale by Sotherbys that is well known that people can trace back the NFT to. In a sense its like a digital antique when there are easy fakes.

My way of thinking is an NFT is a shitcoin with supply 1 and smallest denomination 1.

> My way of thinking is an NFT is a shitcoin with supply 1 and smallest denomination 1.

Ah, see, I ususually skip over NFT nonsense because of the sheer number of WHY and WHO it brings up… but now and then it’s summed up nicely.

> What prevents me from creating new NFTs with the same or slightly modified underlying digital asset?

That one seems like a classic supply and demand thing. Make too many, sell none

Having said that, that does actually seem to be the business model in this wave. At least for the ones people are heavily pushing that get on on my radar. Maybe not hues but "accessories" (procedurally generated png layers, flattened)

It seems as if the only thing I get when I buy an NFT is the ability to prove that I did pay money for that NFT for a specific seller.

But because anybody else can sell anybody else very similar NFTs it looks like the supply is infinite.

The only differentiator then is who is the seller, right? But how can the value of a thing be different based on who sells it?

> But because anybody else can sell anybody else very similar NFTs it looks like the supply is infinite.

People only want to pay for the NFT, because it is supposed to represent a desirable piece of art. The only person who has the moral authority to sell it is the artist. Anyone can create an NFT that "links" to some piece of art they found online, but if I am not the artist, why would anyone pay me for it?

Additionally of course, there are artists whose work is more desired, so they command a premium over other artists.

I can see a way it could make sense. The NFT contains text that declares what the buyer of it gets. For instance they get the right to use the digital art on their website. And maybe a right to sell that right to someone else if they stop using it on their website.

If I tried to create such an NFT from someone else's art that would be fraud if I don't own the copyright to that art.

Is that how it works in practice? Do NFTs (typically) include immutable text which clearly spells out what rights are transferred to the buyer of the NFT? And because the text of the NFT is in the blockchain which can not easily be forged, courts will accept that fact as evidence of a binding contract?

> Do NFTs (typically) include immutable text which clearly spells out what rights are transferred to the buyer of the NFT?

This can be included immutably on-chain. Mostly it is done off-chain, which is ok, because enforcement of any such license would happen off-chain and in courts anyway. Frequently, no license details are given at all, which may also be ok, because people who collect fine art aren't doing it for the use value ("I need a stock photo for my landing page"), they are doing it because they feel good about being an art collector. In that sense, very limited use-rights are actually required.

> In that sense, very limited use-rights are actually required

Specifically, what use rights does an NFT grant?

For photographs (and I have a small gallery of them collected over the years in art festivals and galleries), they're hanging on my wall... though I can't publicly display them (that's part of the copyright).

If I sell a print of a digital image (that I captured with a camera) and I sell a NFT of the same digital image, what are the differences in the use rights that the two buyers have?

If the digital image, hosted on a server that I maintain goes offline (I didn't pay my network solutions bill and someone else buys the domain), what does does the NFT retain rights to?

The NFT is just an entry in a ledger. What rights the buyer has to the intellectual property that is your photo is decided by your respective jurisdictions. In general, I would think this is largely up to you - i.e. only the rights you explicitly granted.

However, I believe in the US, there is no right to even download a copy of a file on the internet for purely personal reasons. I could see an NFT buyer successfully argue in court that this right is implied, even if not specified.

What happens if the file goes offline? I would think that this will not effect an existing license that you have previously granted. Of course, the buyer may struggle to make use of their license rights if they did not retain a copy of the image themselves.

> In general, I would think this is largely up to you - i.e. only the rights you explicitly granted.

Do you have any examples of an NFT that grant rights accompanied by TOS terms for minting the NFT that affirm that it is the original artist or someone who is authorized to do so who is creating it?

> However, I believe in the US, there is no right to even download a copy of a file on the internet for purely personal reasons.

There is de minimis which isn't so much a right but rather a "this is beneath the concern of the law".

As to the US aspect, every country that is a signatory of the Berne Convention ( https://en.wikipedia.org/wiki/Berne_Convention ) recognizes the minimum standard for protection which includes the right to to make replications or display to the public that is held as part of copyright.

For an NFT, would a baseball card be an acceptable comparison for what it represents in the real world? To that end, I would contend that the same thing happens to it when the player that it represents (there is no ownership conveyed in a baseball card beyond the card itself) leaves the game.

It's interesting to think NFTs as digital baseball cards. Both (can) have scarcity.

But baseball cards also have physicality. They are close to our world we can see them and turn them around. Physicality gives them desirable properties like easily carrying them around, no computer required. A physical thing is unique. Any sequence of bits on the other hand can always be copied.

A NFT is just a digital receipt, and there's nothing that ties the receipt to the original creator or work except for a bit of text that the person creating the NFT has full control over. So they are effectively worthless for determining ownership, especially for copyright purposes.

The "non-fungible" part refers only to the receipt, not the original work.

> NFT is just a digital receipt

Right but a receipt of what? A receipt, evidence, or proof, that a transaction took place. But a transaction of what? One party got money. What did the other party get? A proof that s/he paid the money. For what? For the proof that s/he paid the money ... for the proof that s/he paid the money for the proof that ... LOL.

Makes me think that I should make an NFT out of Brooklyn Bridge. That might gain lots of fame and thus lots of value?

It is proof that you added an entry to a blockchain. That's it.

Your last sentence hit the nail straight on the head. You can in fact make a Brooklyn Bridge NFT and you would hardly be alone.

The photoshopping step is unnecessary. You can literally mint infinite NFTs of the same piece of digital art.

> You can literally mint infinite NFTs of the same piece of digital art.

That's what I fathomed. What I don't get is why would anybody pay anything for them

The use cases are more than art. Art is a part of the equation, sure, and we see these... incredibly inflated prices being paid for art as insane. Digital art. That can be replicated. In which ownership of the NFT may/may not convey ownership of the artwork. Of course this sounds absolutely nuts, and people can be forgiven for believing it is absolutely nuts and that's all there is to it.

But consider a very successful real world use case: trading cards. As NFTs, these digital cards are limited by contract on their respective blockchain such that infinite copies cannot be printed - they are limited edition. Scraps of cardboard for this rookie or that player only have ever had value to people who collect them - now the same sort of thing exists in the digital realm, without the risk of losing the physical collection in a house fire. It's less the artwork that is valuable, but the NFT itself.

Another valid use case is Patreon-like support of artists (especially in the music industry). As it is now, tens of thousands of people contribute money monthly to their favorite artists via platforms like Patreon often in exchange for perks like early releases to tracks or works in progress. NFTs can represent the same sort of thing, except that at some point in the future these early released tracks - or really - the possession of a fact of support for a band during their career as an NFT - has value amongst other fans. In some cases possessing these things can become backstage passes to a band at a concert.

Much of the NFT space right now is a cash grab. That doesn't mean valid use cases won't emerge.

> Digital art. That can be replicated. In which ownership of the NFT may/may not convey ownership of the artwork. Of course this sounds absolutely nuts

So. Digital art can be replicated, and they may or may not convey ownership. And then you immediately turn around, replace "digital art" with "digital cards" and "perks" and pretend that this is now somehow different just because you're using NFTs for literally the same thing, but called a different name.

> That doesn't mean valid use cases won't emerge.

It means exactly that: valid use cases will not emerge because of what NFTs are.

None of these are valid use cases. All of what you describe is solved already much more simply and cheaply without blockchain.

Walter Benjamin talked about this problem in 1935 [0]. It's particularly an issue with photography as an art form. For instance Jeff Wall's masters are all stored as RAW digital files and displayed as light boxes [1]. Theoretically he could produce an unlimited number of editions of each work, and theoretically anyone working at a record label who had received a copy of the hq file could do the same [2].

What prevents this and maintains the value of the work is that there are legal and social norms enforced through a vast network of institutions (galleries, museums, collectors, art fairs) that ensure that there will never be more than 1 actual edition of the work, or 2 or 3, whatever it is the number never changes after it is set, and minting more editions would be professional suicide, and the network of institutions would never allow or recognize it even if an artist tried it.

Lawrence Lessig's book Code developed the argument that any combination of social norms, legal structures/enforcement, and code or infrastructure can function as law, and sanction or foster certain behaviour and markets. "Code is law" was a clever observation and a bit of a revelation, but the NFT crowd seem to believe that it's enough or that it has more value than the social norms and contract law of the existing art world. It's engineering mindset hubris.

There's an attempt now to work social norms into the NFT space and enforce etiquette around "right-clicking", but convincing collectors of paintings that they could continue to collect photography was less of a challenge than convincing generations raised on BitTorrent, DRM wars, and authorless memes to introduce false scarcity into online digital abundance.

[0] https://en.wikipedia.org/wiki/The_Work_of_Art_in_the_Age_of_... [1] https://artblart.com/tag/transparency-in-light-box/ [2] https://en.wikipedia.org/wiki/The_Destroyed_Room:_B-Sides_an...

This isn't any different than an artist offering a limited run of physical prints and then going back on their word. There's generally some level of trust between the buyer and the artist and if they break that trust then they hurt demand for their work. I've been following the NFT space for years and I haven't seen this issue crop up much at all.

I can understand that trust and reputation has something to do with it but I wonder with digital art it becomes a question of how much do I need to modify my copy of the original to make it a new piece of art.

And if NFT does not give you the copyright I might sell the copyright or license it to 3rd parties who could not care less about you having an NFT somehow "associated" with it.

I guess the key is what does it mean for an NFT to be "associated" with anything.

It's mind-boggling

What prevents a musical artist from publishing a bunch of unoriginal filler after having a major hit? Is this really a serious threat to the concept of publishing music?

Copies of music recordings aren't typically sold under the pretense that they're unique. If your favorite artist produced a record and sold you a copy, guaranteeing that it the only copy that'll ever be made, you might be inclined to pay more for it. Let's say you buy it, because you believe this might be the only opportunity to own this music. If your favorite artist then proceeded to sell other records with the same music but with an additional 100 ms of silence at the end of each track, you'd feel tricked.

It's a terrible analogy from the start, don't blame me.

> Copies of music recordings aren't typically sold under the pretense that they're unique.

My point is that if you buy a new record from an artist you generally expect it to be original music that’s the product of creativity. But a lot of artists release things that are perceived by many to be very derivative, unoriginal, and not creative.

There’s a limit to artists’ ability to do this. It’s called copyright law and it’s enforced by a central authority. Unfortunately no such central authority exists in the NFT space, so it’s perfectly within anyone’s rights and abilities to copy an artwork and sell it as their own.

When you say "sell an artwork" do you mean sell all rights to it or license its copying for personal use etc? Copyright and contract law still applies. But how does it apply to NFTs?

It doesn’t. Or it will some day, either way, this is the point. It’s still going to require a centralized authority to enforce fair use, ultimately making it no different than any other method of distributing art.

> My point is that if you buy a new record from an artist you generally expect it to be original music that’s the product of creativity.

No, you expect it to be one of hundreds to hundreds of thousands of exact copies that anyone else could buy regardless of whether you own a copy or not, and that will usually be repressed if the supply runs dry. It's the product of a record pressing/CD replication machine more than anything else; no creative or original work goes into producing copy 67,904 out of 100,000. There is no expectation that you are paying for original work. The money you spend might go into funding original work, indirectly, but what you're paying for is a copy, and that's also what you generally expect it to be.

If consumers generally each bought the only copy of the records they own, it might have been more relevant.

But again, this thread is about how different separate creative works from one artist are, not how many identical copies of a single work the artist releases.

The NFT would contain "$doomrobo_public_key owns $k as of $date" signed with the minter's private key. When you decide to sell someone the NFT you append "$new_owner_public_key owns $k as of $date" to the NFT and sign it with your private key: this establishes a secure and verifiable chain of ownership.

You can send two of those assignment signatures to two different parties simultaneously.

Is there a way in your system to avoid the double send?

You can do the same thing with blockchain NFTs, just mint another blockchain NFT with the same content. You can say "well, the NFT that was minted first is the true original" but the same is true of the "double sent" digital signature NFT, one will be dated more recently than the other, which affords one identical guarantees of authenticity to the blockchain NFT.

Thats not the same thing.

I just explained why it is. A one line response of "nuh uh" is not convincing.

Its an analogy and diverts from the original point. We were talking about how you were going to solve double spends without a chain.

You point about minting another is an interesting point but its not a double spend so we veer off the topic.

If we take your point then its the same as saying anyone can create a new crypto and call it Bitcoin. If I have an OG Bitcoin and you have a fake one then you can steel my real one. No you cant.

The reason is that people discern what Bitcoin is vs. other coins.

NFT cooy/paste is a problem but it is a distinct and different problem to double spend.

> We were talking about how you were going to solve double spends without a chain.

"Double spend" is a cryptocurrency problem, NFTs do not have this problem since unlike "currencies" the goal is to create a "non fungible" record of ownership for an off-chain asset; a chain of digital signatures satisfies this need, the double spend issue is not relevant to the stated use-case.

The genesis of this discussion is “NFTs are a scam and are retroactively obsoleted by digital signatures”. I basically said “how to avoid double spend in digital signatures”, someone replied “but you can clone NFTs!”. I said “yes but that is different”.

You are correct double spend is not a problem with NFT because they piggy back on crypto layers.

However double spend is a problem with just digital signatures that “retroactively obsoleted” NFTs.

Since there are multiple people commenting and steering the thread in different directions I feel this is being filibustered. So ill stop replying. Im exhausted!

> However double spend is a problem with just digital signatures that “retroactively obsoleted” NFTs.

As I already stated, this is not true. Nobody can stop an author from minting two different blockchain NFTs pointing to the same content, there's no difference between that and "double spending" a digital signature NFT. At the end of the day, the only thing the NFT does is prove "the author authorized this verbal statement of ownership", a digitally signed text file does exactly the same thing.

I think what you are missing is that for NFT adherents, they don't care about the original content, just the NFT.

btw, I own an NFT that represents all natural numbers, therefore all possible NFTs.

The only difference between a fungible token and a non-fungible token is its fungibility: everything else is the same. The stated use case for both is "I want to know for certain who owns something". A chain of digital signatures fails to satisfy that need. Please stop being so assertive about something you clearly don't know anything about: there are tons of useful complaints about how people are using NFTs, but this is not one of them.

A semantic distinction without an actual difference. At the end of the day all an NFT does is state "author X gives ownership of Y to Z", if you trust the public key of X a signed text file stating "author X gives ownership of Y to Z" gives you identical guarantees to a blockchain NFT stating the same thing. Nothing stops author X from minting a blockchain NFT that states "author X gives ownership of Y to Z" and also an additional blockchain NFT stating "author X gives ownership of Y to Q"... it's literally just a digitally signed string.

What blockchains provide is transaction ordering as a service. If Y is an NFT, what prevents that from happening is the code on the blockchain: the same kind of code (literally, on Ethereum) that prevents Y from being a fungible token for a cryptocurrency that they send to two people (aka "double spend").

If Y is not an NFT, but you know the original owner X, and you wish to create an NFT, the same kind of mechanisms work: the first time you attempt to assign ownership is the canonical one. Which you seemed to get up-thread, you just failed to "do the math" to see why digital signatures alone don't support that as you are so sure cryptocurrencies have no value.

If you send two digital signatures to two people claiming they both own something, the big issue is that the second person might not even know the first person exists. You need some kind of mechanism to invalidate the second one by exposing the first one in a trustless global ledger of events.... that's what blockchains provide.

If you only care about the semantics of disputes--which is potentially fair for claims over a physical object: it acts as a kind of "second factor"--you get a long way by just including the entire chain back to the root whenever you transfer ownership, allowing people to show prominence over other chains they obviously dominate...

...but any time there is a conflict--and not just on the original sale!--in your histories you can't compare timestamps to resolve the dispute as you can't trust them: digital signatures cannot show that one thing happened before the other thing as any timestamp is just data being signed, attached by the signer, and is meaningless.

To resolve these conflicts you need to use your distributed ledger to establish that no such signature has been signed previously: you need a way to authoritatively assign prominence. If you have a solution for this, what you have invented is a cryptocurrency and could be used as such (as there is no relevant difference between fungible and non-fungible tokens).

(And note that this is true even if you try to solve this by using some complex web-of trust of a ton of random third-parties or overlapping sets of parties that different people haphazardly might choose to trust instead of a linear blockchain... you are just talking about systems like Holochain or Stellar or Avalanche instead of systems like Bitcoin or Ethereum.)

> all an NFT does is state "author X gives ownership of Y to Z",

Incorrect. As @saurik says, but I'll just restate: an NFT also tells you the ordering of all such statements within one context (a single blockchain). So you can know whether this was the first such transfer by this owner or a subsequent one. This is the entire purpose of distributed databases, including blockchains.

Actually you can’t know it was by an ‘owner’ because nfts are not tied to the real world. You own nothing but the digital signature.

There are so many problems being skated over here about provenance and ownership and nfts provide nothing of value in that domain, they’re just a get rich quick scheme.

> because nfts are not tied to the real world. You own nothing but the digital signature.

The digital signature is thing that people want to own in the real world!

And yet all the talk is not about the signature, but the thing it refers to. Why is that distinction constantly elided? Is it because the digital signature has no value on its own?

It's because there is no other meaningful way to "own" the thing the signature refers to, if you apply a concept of ownership as you would to a physical piece of art.

Being in physical possession of the bytes to a JPEG is not what gives people the sense that they own this piece of art in the way they might own a painting, because the bytes are so cheaply copied.

Owning the intellectual property behind a JPEG is an entirely different kind of ownership; the value is in the commercial exploitation of those rights, and the buyer is now taking over from the creator in being responsible for said exploitation to get their money's worth. This is not what artists or art collectors want.

The whole point is to artificially recreate the traditional experience of ownership, but for immaterial/digital goods. People talk about owning the work (or an edition of it), not the signature, because that is the whole point of the exercise.

Immaterial artworks such as video art, performances etc. are already being sold in the art market; what you get is a piece of paper stating that you own the work. It's exactly the same as an NFT.

It may seem utterly useless for people who don't care about owning editions of immaterial works of art, but there is nothing scammy about it. It is done entirely in earnest.

Of course there are other ways to meaningfully own the digital artwork, you listed some in your response:

You created the image. You own the copyright to the image (which has legal weight). You may restrict distribution or reproduction in those situations.

These are all more meaningfully ownership than owning a digital receipt on the blockchain pointing to a url on a 3rd party site, which is more akin to buying a star or a piece of the moon from somebody who sets up a website and purports to be selling these ineffable things.

I disagree with you about the point of NFTs, the point of them IMO is to provide cover for ponzi schemes and convince marks parting with their cash that they are buying into a get rich quick scheme in which they'll get rich and someone else will be left holding the bag when they sell their receipt for digital art to someone else.

The references to art markets, asset tracking, provenance, new technology etc etc are just indirection used to distract from the fundamental transaction - give me money (including really high transaction fees for the marketplace) for this worthless receipt which says you own* this digital lion pic, unique amongst thousands of other similar lion pics because it has a cigar or an eye patch. No wonder companies like Nike, Games companies and football clubs and are rushing to take part too and sell fans NFTs, they can't lose!

* For certain values of own not conferring any rights over the image whatsoever.

> Of course there are other ways to meaningfully own the digital artwork, you listed some in your response:

By my count you listed just one - owning the copyright. But as I said, while owning intellectual property is certainly meaningful (and can be valuable), it is not art collecting. There is a reason why there exists no art market where people are trading copyright claims.

As a collector, I don't want to be in the business of managing an intellectual property licensing enterprise. Yet, I want the artwork I own to become a well-known, celebrated cultural object; the artist also wants this, and thankfully - incentivised and empowered by still owning the copyright - will try to manage their career to achieve this.

We can all agree that crypto lends itself to rampant and unrestricted speculation / gambling, which attracts all kinds of people looking for a cash grab or get-rich scheme. Those speculative bubbles have been going on for years, and in all likelihood will continue. It's an issue that artists and collectors in this space are struggling to deal with; people don't like that new releases are sold out in minutes, because flippers and their bots think they can make a profit (this is not dissimilar to event ticketing issues).

However, artists who have experimented with blockchain 10 years ago, were not looking for marks to scam. While pics of lions will go up and down in price, and people who bought even respectable art at the height of the bubble will be looking at a loss in resale value, this market will not disappear; it provides a product that artists and collectors find useful.

I am not of the opinion that this will be as world-changing and all-encompassing as web3 proponents proclaim. Art collection is a niche in the real world, and it will be a slightly larger niche in the digital realm.

Creating something is distinct from owning the copyright (though many jurisdictions automatically assign to creators unless otherwise assigned). For example illustrators for hire immediately assign copyright to someone else, so these are distinct.

The art market is a racket entirely divorced from value, if you want to emulate that, good luck to you, but know what you're getting into, the comparison with the manipulated and celebrity led current art market is entirely unflattering to NFTs as it shows them up for what they are - a get rich quick scheme.

I think this market will disappear when the cryptocurrency bubble bursts, which seems imminent now it has mainstream attention again and with the coming withdrawal of stimulus.

I think you are confusing the image of an NFT with the token itself. That two tokens point to the same JPG (for example) doesn't make them the same NFT. They are two distinct tokens.

Wouldn't the author be different if you just minted a copy? So if the original is from a trust/known entity (like an IRL company or suitably famous artist) this doesn't work. The list of trusted entities could be centralized, crowd-sourced, hand-managed, or anything else; let people decide who they trust to make those determinations and let them switch between them at will.

> Wouldn't the author be different if you just minted a copy?

The problem being described above is the possibility of the trusted author minting multiple digital signature NFTs for the same content. A reseller can't create a copy because they can't sign a message conferring ownership from the trusted source without their private key.

But at least you can check the blockchain for all the content the author has created.

The author could use a unique private key for each blockchain NFT if they wanted to avoid that.

The problem of how to associate a NFT with a physical object is a different one from the transfer/spending problem.

I think that is the "minting" problem.

An artist simply signing stuff does not even prove that a physical object corresponding to the token exists.

I like to think of other use cases, like real estate or stock options. If you talk about a plot of land, it seems feasible to find a unique identifier (you could even involve the government).

Edit: HN does not allow me any more replies right now, so I have to leave it at that. The reason why a "government signature on the deed" would achieve the same thing is because we trust on the government to keep a proper ledger. And the government asks for a lot of money for a transfer.

> I like to think of other use cases, like real estate or stock options. If you talk about a plot of land, it seems feasible to find a unique identifier (you could even involve the government).

A deed digitally signed by the government's private key satisfies this need without a blockchain.

"A deed digitally signed by the government's private key satisfies this need without a blockchain."

Only because the government keeps track of who owns what in a centralized database. Typically they also ask for pretty high transferal fees.

Huh? If you can’t verify that the public key is the author’s then you wouldn’t consider the message to be signed by the author.

Why wouldn't you be able to verify the public key?

You seem to be suggesting that a problem with NFTs is that the artist can mint multiple copies of their artwork, possibly using secret additional private keys.

The answer is that this is not a problem, because the whole point is knowing who the creator of the NFT is, and beeple trying to create additional copies using a secret wallet but not telling anyone will be treated by the market the same as me minting a copy of a beeple piece.

There is some project. NFT Replicas - https://nftreplicas.net/ Nothing is stopping any one to mint another NFT with same content.

Indeed, but NFT enthusiasts would say that the replicas are not valid because they were not originally minted by the trusted author, of course, nothing is stopping the author from minting multiple NFTs of the same content so the point is moot.

Why would you want the minter to be prevented from minting multiple NFRs of the same content? The content is totally moot! It’s the ownership of the scarce token which the author claims uniquely represents the content that people are valuing. Obviously if the author is minting multiple tokens and claiming they all uniquely represent the same piece of content, most likely no one is going to value those tokens much. None of this strikes me as odd or troublesome. It’s how all collectibles have worked long before NFTs.

Minty's "Useless Man" could have been about NFTs.

https://www.youtube.com/watch?v=tqAOaNS1tqM

(May be NSFW depending on who you work for...)

> will be dated more recently than the other

How does the receiver of such a transfer know that the transfer is final? There's no way for them to know that an "earlier" transfer of same item won't show up days later.

Right. This is, by the way, the sole innovation of Bitcoin. Describing a mechanism to establish a sequential order of transactions with finality.

Timestamping servers. Something like RFC 3161 or WebPKI's Certificate Trust logs.

That doesn't help you know the transfer is final, it just gives you a timestamp that the transfer occurred at which somebody reputable has attested to. You can't know that the owner didn't sign a transfer to some other buyer with an earlier timestamp.

Well, no, only the minter can do the first step:

> "$doomrobo_public_key owns $k as of $date" signed with the minter's private key

If you mean the minter could sign multiple owners of $k, of course that’s true, but that’s like saying that a painter could paint the same thing twice or sell printed copies of their paintings. Of course they can, and if they claim that each one is unique they’re likely to find that people don’t value their stuff much.

It's not the same as selling printed copies or painting multiple painting. It's verifying that two different people 'own' the same painting but neither of them has guaranteed rights to it.

You can require edition number / total copies in the original signed claim. Beyond that, you take it to the courts, which is the same thing you would need to do if the same resource was reminded on blockchain. The blockchain may only make it easier to detect a double mint.

You just invent a thing called notaries. You'll have to go back in time to do it since they already exist but that's besides the point. Anyways, a notary puts their reputation/legal liability on the line and counter signs your transaction. Since they've been granted license by a real legal entity with guns and jails they commit to verifying a transaction occurred at X time.

Monies for the transaction can be put into escrow with a third party (you'll need to go back in time to invent that too). When the notary notifies the escrow holder of the signatures they can release the monies.

When you have a legal system to enforce contracts and people put their own money or legal liability on the line two parties don't need to trust one another to conduct transactions. People buy expensive shit all the time. They don't need to trust each other with the money or valuables because they involve third parties that proffer up (staking if you will) liability to let the two parties conduct transactions.

The blockchain model replaces the staked liability with "expensive" proof of whatever. The only problem is monied entities can these proof systems. They can afford to run a majority of miners, stake the most (or spam stake offerings), or whatever otherwise supposedly expensive resource. They're only expensive resources if you naively assume all mining will be done by randos in their bedrooms.

Blockchains are just a way to do something almost no one needs in a slow expensive way.

dish and washing machines are slow and expensive (use a lot of electricity). But in turn you save some time.

Dish and washing machines are not slow. They cut out whole portions of the task of washing dishes or clothes.

No it doesn't, because you can simply keep selling the "old" version with the signature that say that you are the owner. It is digital, so you can make an an endless number of copies.

You can do the exact same thing with a blockchain NFT - there's absolutely no difference in terms of outcome. Each "sale" generates a unique digital signature NFT because the public key of the person buying is incorporated as part of the cryptographic signature.

Every sale is on the blockchain, so if somebody creates multiple sales of the same item, it would immediately be visible. Of course it depends on the implementation, how do you identify an object?

Leonardo could still create one NFT saying "this is ownership of my painting of the woman that always looks at the beholder" and another saying "this is ownership of my painting "Mona Lisa" and it would perhaps not be immediately clear that they are the same painting.

Nevertheless, that is the "minting" problem and not the "spending" (or transfer) problem.

Edit: HN does not allow me any more replies at this point, sorry.

> Every sale is on the blockchain, so if somebody creates multiple sales of the same item, it would immediately be visible

Just use a different private key for each sale.

The private key identifies the artist, so that is not a solution.

No, the private key does not identify the artist.

Instead, what identifies the artist, is the artist saying "hey, this thing over here is the real one!".

None of which involves a Blockchain.

Not sure if you understand how public key cryptography works?

The artists says "this is my key" to their public key. Then they can use their key to sign things, and people can verify the signature because they can check that it belongs to the public key, which the artist has publicly announced.

That doesn't work, because anyone can falsely claim to be the artist.

Obviously you need a way to identify the real artist. For example if they put their public key on their official web site, it would be a pretty good indicator.

People also used to create chains of trust with public key infrastructure. Maybe you trust Bob, and Bob trusts Alice, and Alice has personally met the artist at Burning Man and verified their key there.

Or you go to the government and let them provide a register of identities. In any case it is a separate problem.

If you can't verify the artist, don't buy the NFT, or only buy it at a discount, accounting for the risk. Forgeries are a problem with physical works of art, too.

> Obviously you need a way to identify the real artist

Thats the point though. Nothing about the blockchain has anything to do with this part, and this is really the only part that matters.

So, once again, my point stands. The private key has nothing to do with identifying the real artist. Instead, it is something else entirely that identifies the real artist.

> on their official web site

So then the official website is what is doing the identifying here, of what the real art it. Not the blockchain. It is the artist themselves, saying "This art is the real one", not cryptography.

It is not proof of work, or proof of signed private keys. Instead, it is proof of "official website".

> In any case it is a separate problem.

It is the only problem that matters. The actual way to identify the real artist, separate from the blockchain, is what is actually doing all of the heavy lifting here. The private key isn't doing anything on the important part.

" and this is really the only part that matters."

No it isn't. The point of NFTs is to prove ownership and facilitate trade. Not identifying creators.

But you can't prove ownership of the actual art, with an NFT.

You can only prove ownership of that specific crypto transaction, which might be just a fake NFT, or duplicate.

There is nothing about crypto that actually proves it was the "real" NFT, or real art.

You need something else to actually prove that you own the "real" piece of art or NFT.

> Not identifying creators

If you are unable to identify creators then you are unable to prove ownership, because that NFT could just be a fake one, or even a duplicate that the creator has issued many times without you knowing it.

With crypto alone, you'd only be able to prove that you own something that might just be a fake or duplicate, and anyone can make as many fakes or duplicates as they want, so that's not really proving ownership.

You are conflating several issues. Yes, a creator presumably would have ways to cheat the system, for example by selling the same thing on different blockchains (as mentioned elsewhere). But eventually they would be revealed to be frauds and presumably the worth of their creations would plummet.

To verify the identity of a creator is a solvable problem, though, and is also yet another issue than the "sell it multiple times" problem.

> Every sale is on the blockchain, so if somebody creates multiple sales of the same item, it would immediately be visible.

There is an infinite number of blockchains.

The people decide which blockchain to use.

I want to add, while I suppose in reality people would settle for specific blockchains (like you can identify the Bitcoin blockchain), I can see a problem for NFTs. As long as there is not the ONE blockchain for NFT ownership, it would be difficult to prevent somebody "selling" the same thing on different NFTs.

Even if the seller says "xyz is the official blockchain", it does not really solve the problem, as they could just say that several times for different blockchains. It does not actually add new information (signing something and putting it on blockchain xyz is equivalent to signing something, putting it on blockchain xyz, and saying "xyz is the official blockchain for my NFTs").

You bought a NFT on some blockchain that exists now, you didn't buy the number. I can sell that same number to someone else, and I could print a big picture of it on fancy paper in a nice frame and afix a hologram seal of authenticity. You owning the NFT of that number doesn't give you any rights to that sale, just as my framed picture doesn't give me any rights over the NFT.

You create a new signature signing a message saying you transferred this. The important bit here is some public immutable record. If this happened on Ethereum, and Ethereum ceased to exist, then your NFT would cease too. If you used say a archive.org snapshot then your NFT would live as long as archive.org servers are up.

> "layer 2" is just a diplomatic way of saying "offchain centralization"

Some popular types of Layer 2s, namely zk rollups, have on-chain data and on-chain transaction verification, so I believe you are wrong on this count.

I guess I am really out of touch but I understood about two and a half words of what you just said.

It means that everything you need to arrive at a consensus on the validity of a transaction is on the blockchain, and thus enforced by the decentralized network of nodes that validate the blockchain.

So contrary to what the grandparent comment claims, these layer 2 (i.e. scalability) solutions make no compromises on decentralization, as they would if they had a consensus-critical component that was managed by a centralized off-chain party.

It's a bit like having an in-mem db that then commits your transactions to the actual DB which is much slower.

Are you referring to the likes of Polygon / MATIC?

Polygon has several products. Usually when people say "Polygon" they are referring to Polygon's popular sidechain product, but Polygon's Hermez product is a zk rollup like I was talking about.

Do digital signatures really make the blockchain obsolete if they fill the same niche?

Even if blockchain are technically equivalent to digital signatures, it seems like it has some real advantages from a business perspective: - it is capturing the market of people who want to buy "official" digital assets and is becoming the de facto way to do so - the market is one that should have strong network effects - gaining the trust of that market is crucial to supporting these sort of trades

I still think NFTs are a bubble that will come back down to Earth eventually. But I also find sneaker and stamp collectors equally perplexing, and people don't discuss these phenomena with the same sort of skepticism.

>But I also find sneaker and stamp collectors equally perplexing,

People for the most part don't get rich off of stamps. Is more of a hobby than an investment.

I know people who made a decent living from sneaker trading though.

Same. Know a handful of ppl making well into 6 figures a year selling on StockX.

Yeah I grew up in the hood and some of the more successful people from my area started their financial life by sneaker trading.

you can make a decent living in all kinds of nonsense if you can either find a way to predict collective mood swings or just get lucky. with millions of people scheming at blockchain stuff there will be thousands getting lucky over and over thinking they are smart

But at what point do we qualify something/someone as “smart”? I’d argue that someone that’s getting lucky over and over again are clearly on to something. As the saying goes: “You create your own luck”.

> But at what point do we qualify something/someone as “smart”?

That's a good point. We can only give our guess based on what we know. For example, people regarded Alan Greenspan as "smart" before 2008. I now think he is an idiot at best and a horrible, malicious person at worst (the truth is probably somewhere in between). Maybe things will change in a few decades and people will then recognize him as "smart" again? It is pretty silly trying to predict the future.

> I’d argue that someone that’s getting lucky over and over again are clearly on to something. As the saying goes: “You create your own luck”.

I present Sir Isaac Newton as a counterexample. Clearly a smart person but just because someone is smart does not mean he was right about everything. In fact, we know now that his nonsensical "work" with alchemy killed him. I am positive that this fad will fail. I am just annoyed that now the name web3 is taken by this nonsense.

Most of the entertainment industry is about predicting collective mood swings.

People made good money selling Beanie Babies, Baseball Cards and other fads... at the beginning of those.

For many people, NFTs are also a hobby not an investment. You just hear about the investors because they are the loudest.

> NFTs are also a hobby not an investment. You just hear about the investors because they are the loudest.

Or the only voice, because no one else is interested in looking at a hash for fun. The real artwork is easily digitally duplicated and so if your hobby was to look at the art, you do not need to purchase the NFT.

Spending a few dollars on NFT "ownership" is worth it to me to have my name next to something, just like spending $10 on a League of Legends skin is worth it to some people to have their name next to a piece of artwork in a video game.

I am literally interested in looking at a hash for fun, since it shows up online in NFT viewers with a little picture of it in my account. $10 is such a small amount of money to me, if I didn't spend it on an NFT then I may have bought a CS:GO skin or hypothetically some Candy Crush lollipop hammers, spent it at the arcade or put it into a slot machine or something. The NFT sparks better conversation.

That's before getting into the fact that if I buy an independently drawn NFT, that $10 doubles as a donation to help support the artist's work, and the NFT becomes public proof that I helped financially support the artist.

so NFTs are Candy Crush lollipops, but not attached to a particular game?

That's probably the weakest of my examples, since lollipop hammers are at least valuable for their utility within a video game.

I would think of art NFTs as more like character or weapon skins - completely useless except that it's visually appealing and you can show off your "ownership" of it to other people within the game. With art NFTs, the "game" so far is just NFT viewing tools, social media profile pics, etc.

Actually, premium Steam profile borders might be an even more apt analogy, since they aren't tied to any game and are also useful solely for vanity.

Of course, then you have NFTs that actually do represent usable in-game items like with Axie Infinity or Gods Unchained, but that's an adjacent topic.

You can also spend money and get a star named after you. I suppose you could assign an NFT to the stellar coordinates and sell the stars as well.

Not only could you sell stars as well, you could sell the same star on multiple chains!

I'd totally buy a star NFT sold by God, which is the correct equivalent.

And how would you verify that the address the NFT is sign with belongs to god?

I would presume God would find a way to make his intentions clear, maybe through his earthly agents in his church.

If you are concerned that this would need to happen off-chain, and I would need to trust my channel to God NFT launch announcement, then you are of course correct, but note that is is not a slight on NFTs.

NFTs are conceptually no different than the "Google Digital Art Marketplace", except people are less concerned it will be shutdown in two years.

Beanie Babies, Baseball Cards, Comic Books all had period of rampant speculation whos markets were destroyed once people who "invested" tried to turn their assets back into cash. Hobbyists just suffer through these periods.

Anecdote time, I was at an Xmas party and people were talking about what crypto they were investing in. I said I speculated a bit, then got spooked and got my money out of Crypto.com. (which wasn't easy). This got everyone interested, they had no idea how to turn their Crypto back to dollars. The market is going up, because there's a one way flow of money.

> I still think NFTs are a bubble that will come back down to Earth eventually. But I also find sneaker and stamp collectors equally perplexing, and people don't discuss these phenomena with the same sort of skepticism.

While I agree with basically all of your comment, I'd like to point out that plenty of people in the online space look at the sneaker market with the same skepticism... but that skepticism isn't stopping teenagers with rented bots from making some serious money buying and flipping new releases.

Skepticism was a poor choice of words on my part. I think skepticism is absolutely the right response for both sneakers and NFTs.

What I should have said is that it seems a lot of people dismiss NFTs with a certainty that doesn't seem justified considering there are other collectibles like baseball cards without any inherently valuable physical properties that have retained their value long-term.

I honestly don't know anything about the sneaker world besides that it exists, so that shouldn't have been my example.

I actually think there is an interesting and nuanced conversation to be had on what fundamentally is different between an NFT and a baseball card. But that doesn't seem to be the conversation anyone is having.

I have been thinking of this as well. Pokemon cards as NFT would work, but why would the Pokemon company (the central entity) be ok with having a decentralised solution for it? What does the company get?

NFTs need support of the big names but they already have better solutions for what they want. Currently NFTs are creating their own set of *mon cards but I don't see why I would want that.

Another example - currently digital games aren't resellable and NFTs could solve that problem. But why would Nintendo, Sony, Microsoft etc want that?

A couple of things to note here:

- New brands are created all the time; you don't have to be Nintendo to do so. maybe you get bought be Nintendo after.

- Big brands ultimately still need to go where the customers are.

- What the blockchain gives your digital good is a sense of permanence. This may not matter for an individual purchaser who simply wants to speculate in a hot market, but there would be no such market if the ownership ledger was run by single company. The narrative that these ownership records exists on a blockchain that will survive any particular startup failing underpins the whole thing.

Well one major difference is that a person could ruin their cards or bend them.

There is also the grading system and you can't really make the card go up in grade, just down.

The whole boom in the 80s really started because boomers came into their prime earning years. When they were kids baseball cards were mostly to put in their bike spokes to make a clicking noise or thrown around so cards in great shape were in short supply. Most importantly though they were not coins or stamps that their parents collected.

I use to listen to a radio show 5 years ago for card collecting that the whole show was basically people calling in and the host telling them the cards were not worth anything.

This past year though is the all time high for sports cards but we already well off the peak.

The problem with NFTs is they came along at the peak of the everything bubble so the prices have nothing to do with reality. Digital collectibles make perfect sense and are no less goofy than anything else people collect.

Not something I would ever buy but ultimately nothing is as goofy as the price of an original Mark Rothko painting. To me that is the gold standard of collectibles and the rationality of the collectibles market.

> I honestly don't know anything about the sneaker world besides that it exists, so that shouldn't have been my example.

Fair enough! As a neat entry point into it: the sneaker reseller world is incredibly high tech: the bot platforms make huge amounts of money and have quite good UX these days. Impressive bits of tech, even if I despise what they're used for.

Baseball cards now have value, in the period of 1990 to 2000 they were pretty worthless after the bubble of the late 80s crashed. They retain value though nostalgia, as soon as they become an investment again, and speculation starts, a new bubble will build, with a crash following.

Totally agree. Sport card collecting is just as ridiculous as the concept of NFTs.

A piece of thin cardboard changing in value based on a guy hitting more home runs.

Stamps and coins are the WW2 generation version of all this.

Practically everyone has their own personal form of gambling and at the same time everyone believes all the other forms of gambling are foolish.

> it seems like it has some real advantages from a business perspective

Even if homeopathy is just placebo, homeopathy has better marketing.

I have to say your statement is quite accurate. But the last sentence just reflects the eventual success of the Web3. It is all about making money, aka being greedy.

Agree. It's only the term `web3` is confusing. It should be called `crypto`, since it's a niche, not like `web2`, which is universally suitable for everyone.

One correctiong. NFTs is just a tool. I believe what you mean is that Digital Arts market based on NFTs is a bubble.

I agree and I wish more people understood this distinction.

To say that NFTs are all scams is like saying that pixel shaders are all games. One is often used to implement the other, but they're not the same thing.

NFTs will likely find niches outside of signifying ownership. For instance, I'd like to see them used to denote package maintainer status. That way you could have automation that allows package maintainers to do certain maintenance things like publish the hash of the next version, and if they transfer the token to a new maintainer, no permission rejiggering would be required.

Pixel shaders are useful.

Except, ironically, when they're used for mining cryptocurrencies (okay, not pixel shaders, but close enough).

Token ring protocol was useful, back in its day. Those tokens were also non fungible (admittedly, there were weaker assurances around that nonfungibility, but I think that's orthogonal).

What happens to the package if the maintainer loses their password?

This is a cool problem. Never looked into it any further but there is some proof of concept code out in the wild about this.

"Social key recovery" https://vitalik.ca/general/2021/01/11/recovery.html

How's that different/better from just passing an rsa key around?

Sharing private keys is bad practice for a lot of reasons.

Presumably in this case you're doing this without a third party like github (e.g. the code is stored on ipfs).

Rotating that rsa key requires all of your users to update things on their side so they'll continue accepting updates signed by the new key. That's a problem because you want key rotation to be low-effort so people do it just in case, and notifying every user is the opposite of that.

On the other hand, when a new user or organization takes over for an old one re: publishing updated versions (presumably there's a smart contract that gets updated with the latest trusted hash by the tokenholder), that's an event where you really do want all you users to scrutinize the new maintainer.

Key transfer is opaque, NFT transfer is transparent.

Another application I've seen is using NFTs for reselling digital tickets.

This is exactly one of the use cases I am excited for NFTs.

I hate tickets resellers.

If NFTs could allow you to resell digital tickets out of Ticketmaster’s hands. I’m all for it. Otherwise I’ll be really disappointed.

Also, people collect tickets. After the event has occured.

>>NFTs are a scam and are retroactively obsoleted by digital signatures.

A credibly open and neutral protocol for holding and trading digital assets is not something digital signatures can provide alone. Digital signatures do not solve the double spending problem without trusted third parties. Thus far only blockchains have been able to provide this set of qualities.

>>All of the ideas about logistics tracking, deed tracking, etc etc are all rendered pointless by the oracle problem, you can get identical guarantees with digital signatures minus the blockchain.

Digital signatures provide no guarantees about data processing and availability. Massively distributed public blockchains do.

DeFi is DOA. Gas fees are insane, "layer 2" is just a diplomatic way of saying "offchain centralization"

It may come as a surprise but there are other chains that support DeFi apps and which do not have high gas fees like Ethereum. For example, Avalanche and Solana.

Collateralized crypto loans are the equivalent of people taking loans out on their equity position so they don’t have to pay cap gains and don’t need to Liquidate. So the use case is already demonstrated, it’s just now applied in a crypto world.

That is not why people take out loans. They do it for leverage and to avoid selling because they want exposure to ETH or BTC. There are easier ways to avoid taxes.

Go on

> There are easier ways to avoid taxes.

Such as?

Solana is centralized, no? If a handful of people can shut down the entire network in a few minutes, how is it a strong network? How is it not centralized?

To add to this, are not most blockchains centralised around the core dev team?

The money transfer/bookkeeping system might be decentralised in comparison with standard finance, but it’s no less centralised than a fiat currency, and at least the democratically elected government in my country can 1: be voted out, and 2: employs people who actually understand finance and economics…

Both of those are centralized, and will need to compete with zk rollups on Ethereum in the coming year, which will have tokens too, incentivizing people to try it out.

NFTs can also contain unlockable content which gives them utility, and more than one edition of a given NFT can be minted. Gas fees vary drastically depending on the chain.

Digital signatures could provide some sense of ownership, but how does that solve transferring value/payment, especially the common scenario of splits/royalty percentages on subsequent sales?

As a concept I don’t think they are going away, but their implementation will vary over time.

> None of this is about giving power back to individuals

Exactly, when people claimed web3 is about the individual and decentralization I knew 100% it is a power play being attempted by some stupid people who have no idea how the web works.

>every DeFi scheme is a money loser relative to just buying eth and waiting for a pump

Maybe, until ETH never pumps again.

Eventually the blue chip cryptocurrencies will find their fair price, and price swings of 10-20% in a single day will be a thing of the past.

DeFi DAOs like Curve Finance [0] (currently leading the DeFi pack in terms of Total Value Locked [1]) will generate income for whoever holds a CRV token... so long as the crypto trading markets exist.

Curve actually provides a service. They pool liquidity to enable larger trades with less slippage, and as such they're extremely popular.

The gas fees are not an issue either, as Curve works across 7 different layer 1 blockchains at the moment and I am sure that is bound to increase in the future.

[0] https://curve.fi/

[1] https://defillama.com/

What are your thoughts on Ethereum sharding and proof of stake for scaling transactions and lowering costs?

The critical innovation of blockchain is that it takes your digital signatures and orders them in a way that's byzantine fault tolerant.

if you are trying to be persuasive you should know that what you said is complete gibberish to tech saavy people who are not already bought in to whatever you are talking about.

This shit is so pervasive. Honestly seems more like they're trying to get up-votes from fellow crypto enthusiasts than trying to convince anyone; except perhaps themselves.

I don't really care about upvotes, I just think that it's an important point to understand the technology. I'm not saying anything positive or negative about it. I'm just that blockchains are about more than logging cryptographic signatures -- they're also about ordering those cryptographic signatures.

I mean, if you don't know what byzantine fault tolerance [1] is, then that's fine. It's not gibberish to people who are into distributed systems. And I'm not claiming it's a silver bullet or trying to persuade anyone either. BFT is overkill for most use cases, but sometimes it's useful. ¯\_(ツ)_/¯

[1] https://en.wikipedia.org/wiki/Byzantine_fault

The commenter above was certainly familiar with BFT. It wasn't the term as such that was gibberish.

But rather, the implication you were attempting to make that this is a "critical innovation" that provides value.

What's gibberish about the implication? That's all a blockchain is. It takes cryptographic signatures (or more specifically, transactions that are cryptographically signed), and puts them in order.

As pointed out, the cryptography existed well before blockchain. My only point was that the fancy decentralized way it orders the transactions is the real innovation.

(edit: grammer)

It's gibberish because you don't justify why this innovation provides value.

Instead you just slather more fancy technical lingo on top.

It provides value to people who want to compute things on a public network that no single party controls. We can argue about whether or not that's a worthwhile thing for people to value until the cows come home, but I think it's beyond the scope of this conversation.

But point taken. I'll avoid using fancy technical lingo like "BFT" or "cryptographic" on hacker news any more.

Yeah, this "cryptographic" stuff is just way over our heads.

The blockchain and even the EVM are not distributed systems. They merely run the same (mostly pointless) computation, on every single node participating in the system.

To me, distributed systems means parallel computation. The blockchain by definition, cannot be parallelized (except when someone manages to pull off such a large theft that the developers are forced to fork the blockchain).

They are decentralized systems, which achieve their decentralization by being as inefficient as possible. Sure, it's a bit clever, but it's also incredibly stupid.

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