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Comment by thrwy_918 | Hacker News Reader

> More simply, it allows you to buy and sell the ownership of digital art

I simply do not agree with this characterization. At a minimum, the vast majority of NFT transactions do not allow people to buy and sell ownership of digital art. They allow people to buy and sell ownership of the NFT itself. Unless you consider the token itself art, this is a very different proposition.

People come up with all sorts of complicated metaphors for what NFTs are, but at the end of the day, they are digital tokens. That's it. An NFT is not the digital art that it may be notionally connected to.

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Linus Akesson (big in the C64 demoscene) created the only good example of an NFT I've come across [1]. In the token he puts the source code to his "A Mind Is Born Demo" which compiles to the very demo you watch when you view the token [2].

[1] http://www.linusakesson.net/scene/a-mind-is-born/nft.php [2] https://opensea.io/assets/0xa7702e0769c5d408ebf2b056d7c3cc0a...

What prevents the author from selling another token with the same content? How is the content unique to the buyer?

Nothing really. He addresses this in his post. But also the purpose isn't to sell the song (it's already creative commons). Purely just a commemorative token (and the only one he plans to make. It's not about ownership of the song though.

But the reason why this is such a great example for me is because the token actually contains something substantial. This song is now permanently a part of the blockchain, as opposed to just some link to an image host that might not exist in a decade.

You can think of NFT like a baseball trading card. You may get an ownership to the card, but you won't get ownership for that baseball player depicted on a card.

Now of course, if there's a contract that says "whoever owns this baseball card owns this baseball player" then you get an ownership, but that's unlikely. Same with NFT, unless there's recognition and contract in place that designates ownership of actual work, you won't own the work itself.

There are unlockable NFT's where you get access to what is inside. Think of a JPG with the words "My favorite Color" in a black font on a white background. That's it, and that's all any non-owner sees. Only the owner is able to unlock and see what it is. Everyone else knows my favorite color is inside that NFT, but they don't know what the color is.

It's an overly simple example of course, but now carry that out to trade secrets, future stock prices, gambling picks, private videos etc. The "art" on the outside isn't really relevant. It's just an indication of what it is you're owning. It might be just that art, or it might be something else depending on the contract. You're seeing the box, not what is in the box. You have to own it to get the contents of the box.

> There are unlockable NFT's where you get access to what is inside.

The use of NFTs for tracking subscriptions, memberships, or other credentials is an interesting idea in its own right, but let's not confuse the issue by claiming that these external services keyed to NFT ownership are somehow "inside" the NFT. They're a hybrid of centralized services with decentralized access control. Everything "inside" an NFT is a matter of public record on some blockchain; the nature of the system precludes storing any hidden information. Ownership of an NFT can serve as credentials for accessing information on some other server, but then you're forever dependent on whoever runs that server.

Of course if you're dependent on a particular centralized server for the content anyway then that server could just keep track of the ownership itself and avoid the overhead of a blockchain, but there could be cases where multiple services want to share the same access control in a decentralized, market-oriented way.

Well, technically one could save some information that could only be unlocked with a private key directly on blockchain, without centralized servers. Selling such piece of data would mean decrypting it with old owner's private key and re-encrypting it with new owner's public key.

I have no idea if any NFT is encoded this way though.

> Well, technically one could save some information that could only be unlocked with a private key directly on blockchain, without centralized servers.

Sure, but that just moves the problem around; instead of secret data you have a secret private key to manage. The cyphertext can be stored anywhere—on the blockchain, in IPFS—but the private key to decrypt it remains separate from the NFT: If you put it in the NFT then everyone would have it.

> Selling such piece of data would mean decrypting it with old owner's private key and re-encrypting it with new owner's public key.

Any protocol such as this would require out-of-band communication and carry counterparty risk. What happens if someone sells the NFT but refuses to hand over the data, or claims not to have it? The smart contract can't deal with this as that would require making the key public. I'm not seeing any way that an NFT improves the process over simply paying someone to give you a copy of the secret.

Worth a read - https://editorial.mintable.app/2021/09/05/unlockable-content...

From the linked editorial:

> NFTs can be resold on-chain, whereas unlockable content are items that live off-chain, and therefore cannot carry on to future owners on the blockchain.

That pretty much says all you need to know about "unlockable content". Simply put, if you buy the NFT through their platform they'll give you something extra. This bonus content isn't actually part of the NFT at all and is indistinguishable from any paid digital download, apart from being bundled with the purchase of an NFT.

Only it's not very easy to make an exact copy of the baseball player. The digital art, on the other hand...

The thing is that even with a NFT token, you are not even including the art itself in a token, rather a link or identifier to it. So there's nothing that prevents multiple tokens pointing to the same art.

This is just as multiple baseball cards pointing to the single baseball player.

Yep, I’m agreeing with that. I’m also augmenting the argument that NFTs are pointless by saying that in the case of digital goods there can be an infinite amount of identical copies as people want so even if you somehow manage to limit the number of NFTs pointing to an asset, it’s still not really unique.

Thing is, what’s “non-fungible” here is (arguably) the token itself, not the thing it points to.

I came here to say this as well. Who are these guys and why have they gotten this crucial point wrong?

Because they relied on an nft marketplace for definitions:

> For more information on NFTs and the terminology used in this article, the OpenSea NFT Bible is the current de-facto document for NFT knowledge

They sort of get to this at the end of the article, but are right.

The reality is that NFTs are vehicles for money laundering and gambling. They really have nothing to do with the art.

Gambling yes, but so far the money laundering claim is baseless outside of hypothetical scenarios. The overwhelming majority of NFT sales are retail sales well below the $10k price point.

While I haven't seen any actual data, I suspect tax dodging is also a significant motivator in the NFT market (just like the market for physical art assets)

I think it might be for some people, sure, but usually the argument is that things like this are the main driver of NFT sales, which I think is way off the mark.

Which is exactly what you would do if you were money laundering because it keeps it below the bank reporting threshold.

Unless some artists start to use the keys to let the customer the visualization of the art. Anyway this would be the end of art as we know it... obviously...

I don't know much about NFTs, but I understand it as a sort of "certificate" (?).

Like buying the rights of an old album; an album for which the original is lost. I might receive some piece of paper that says the songs are now mine. Of course, there are already thousands of copies of the songs, but (somehow) now the songs are mine, and I can certify it.

> but at the end of the day, they are digital tokens

I can simplify everything up to the point of saying that the 10 bucks bill you have in your pockets is just a piece of paper, but we all know it's more complicated than that.

And yet, NFTs grant no 'rights to use': licensing, copyright, terms of use, or any other legal terms of the sort. At its heart, it's because blockchains are not widely recognized as legally authoritative. They /cannot be/, since there is no guarantee that an image is uniquely identified by one NFT across all blockchains, and therefore a court would be required to pick and choose 'winners' when considering which blockchain rightly determines ownership.

Individual companies/orgs can confer rights to holders through their T&Cs, but that's revocable and hard to prove. For example: https://boredapeyachtclub.com/#/terms BAYC gives full commercial rights to holders.

Would be really interesting to actually see that challenged in a court.

Back in the 1990's we used to call things like that "license keys".

As I said, I don't know much about NFTs and I was just commenting out of curiosity. I have no stakes in NFTs.

But if the problem is legal (and not technological) then it may be just a matter of time, given enough adoption. Much like Bitcoins (now running as an official currency of El Salvador).

Perhaps it's a matter of establishing we run on this or that blockchain to make NFTs completely traceable?

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