I hate to admit it but I’m still struggling to understand why people would pay so much for NFTs. I feel like I fully understand what they are and why most people want me to believe it has value but I still don’t agree. I’m waiting for my mind to change but it hasn’t happened yet. It’s frustrating because so many people I respect are leaving their high paying jobs to work in web3 startups around NFTs and I feel dumb for not getting it.
The most plausible conspiracy theories I've heard is that the big sales ($1 million plus) are wash trades, ("sell" an object to a confederate for 500 ETH, then they transfer the money right back via another route) and some classic money laundering
Now of course there's a mountain of clueless suckers kicking off a regular tulip mania-style bubble. I wonder how many more weeks it will last.
> Wash trading is a process whereby a trader buys and sells a security for the express purpose of feeding misleading information to the market. In some situations, wash trades are executed by a trader and a broker who are colluding with each other, and other times wash trades are executed by investors acting as both the buyer and the seller of the security. Wash trading is illegal under U.S. law, and the IRS bars taxpayers from deducting losses that result from wash trades from their taxable income. [1]
Whew, good thing it's not a security, otherwise it would 100% absolutely be a half billion dollar illegal wash trade, and that kind of stuff comes with time in the big house. IANAL, but stunts, amirite?
We can't apply 1:1 laws to crypto precisely because of this.
I can write a piece of code in a few minutes for all the collection I own, does not make it wash trading. In fact, you can very easily check it on etherscan or similar tools that this was a flash loan.
> We can't apply 1:1 laws to crypto precisely because of this.
I think in a lot of cases that's simply wishful thinking. They Howey test is actually a very good fit in the crypto space broadly, especially alongside the guidance from the SEC on how to interpret it with respect to digital assets. [1] Most tokens are just straight-up securities, what we're lacking isn't regulation but enforcement.
NFTs are likely not securities as they fail the Howey test. [2] Fractionalized NFTs, however, probably are securities.
> I can write a piece of code in a few minutes for all the collection I own, does not make it wash trading.
It's still wash trading, of course, it may not be a crime because it's not done against a security as I mentioned.
IMO it could be some other kind of fraud or civil matter already as you're enticing a purchase on the basis of intentionally misrepresenting past trades. If not, I agree, this might be a good area for some additional regulation, either here or in markets broadly (I'm looking at you, art and collectibles).
NFTs are likely not securities as they fail the Howey test.
NFTs for things that already exist are likely not securities. But NFTs for things that don't exist yet, such as as virtual land in un-implemented virtual worlds, do pass the Howey Test. You're funding the development of something, not buying something that already exists. That's an investment. At some point, probably after the first widely publicized collapse, the SEC will shut many of the future-oriented NFTs down, much as they did to the ICOs starting in 2018.
Virtual land in vaporware virtual worlds is the same scam as selling undeveloped swampland in Florida, a popular scam in the 1950s.[1] There are few new scams. It's mostly the same old ones with new shiny packaging. Most of them are listed in Extraordinary Popular Delusions and the Madness of Crowds, from 1841.
So to be clear the community is encouraging criminality and attempting to brow-beat folks suggesting compliance with the law into accepting said criminality? Sounds healthy, and definitely not like a cult.
It’s not a good look to be on the receiving end of government benefits and services, gloating about your lack of contribution and encouraging others not to. This may look good in crypto circles but here in the real world it makes you look pretty bad, not gonna lie.
I've always wondered how those Bond villains accrued an army of employees on their remote militarized outposts helping them do crime, though I'm beginning to suspect they just slippery-sloped their way into it.
So to be clear, no, that's not what the meme is about. Is your essay from GPT-3?
It's about not offering anything to a discussion as they also don't even know about what tax is relevant. This person follows that rubric exactly, as they "suspect" a tax is involved, when a flash loan wash sale would just as easily not cause any tax at all and they offer no introspection into the nature of the transaction and what questions remain about how it conforms with the tax code. A person borrows money to pretend to transfer an asset to themselves and returns the money. Neither borrowing money or moving the asset to your other account are tax events. The tax remindoooooooor comes to the discussion way after the party, clueless, and says something clueless. Its predictable, its meme worthy. Pretty much everyone in crypto runs into people like them so the memes are made.
I mean one could begin by looking at when taxes are due at the transaction of an art piece, and ask an attorney, instead of just assuming no taxes are due and wandering off could one not? The burden is on them. And then when someone suggests doing the bare minimum due diligence on a half billion dollar transaction replying "the tax remindooooooor."
You can see why pretending no taxes are due because "blonkchain" and making fun of someone who suggests that doing some due diligence on a half billion dollar transaction isn't a good look, can't you?
Do you really think it's unreasonable to assume a half billion dollar capital gain isn't a taxable event?
> "... when a flash loan wash sale would just as easily not cause any tax at all"
What's your basis for this guess? Is it because a tax wouldn't be due on the sale of stock you repurchased within 30 days? That's called the wash-sale rule and it only applies to securities. It doesn't even apply to commodities or futures - or crypto. So either it's a security, in which case this is a federal crime, or it's not a security, and the wash trader has to pay taxes on the first transaction - and a hypothetical second transaction would have to be made to generate a loss to cover.
Y'all need to get over yourselves, the toxic community is easily the worst thing about crypto - and that's after figuring in the ruining the world with your emissions so you can gamble bit.
Both my tax lawyer and CPA said no tax event, and that the circumstances about why its a no have nothing to do with the crypto/blockchain component. Because it didn't move between parties. The blockchain just lets that conclusion be made faster because everyone can see the transaction, except the people who wouldnt bother to look (because blockchain) and wouldnt understand if they did look (because blockchain).
You are the only one shoehorning your preexisting notions into a benign comment. There are so many better ways you could apply your energy. Many blockchain skeptics wind up defending the technology more often because their other skeptical friends are saying procedurally generated non-sequiturs. So they wind up in an educational role as their criticisms become more valid, and the education winds up strengthening the space by fixing the criticisms. Right now you’ve been stuck on less valid criticisms, for years. Its not going away so why not help make it better when you learn valid criticisms.
> Many blockchain skeptics wind up defending the technology more often because their other skeptical friends are saying procedurally generated non-sequiturs.
I wrote my perspectives, and you are once again just being toxic. This isn't reddit.
My comment about the toxic community you once again exemplified perfectly. You knew the answer to this question and instead of letting the poster know, and teaching them something interesting, you instead chose to make fun of them. And when I pointed out your toxic behavior you chose to mock me. Nice.
I will mock your procedurally generated non-sequiturs on any topic. From my perspective, I say enough to promote introspection on its own. But you do have a point, as you mentioned that it wasnt enough for you to perceive what the meme was about as you instead wrote totally mockable copypasta. So I’ll try to keep it in mind and just lead with the answer so that you think its less toxic.
They got the joke wrong and imagined something completely different, that is completely fair game to be made fun of. Is that really whats considered toxic right now? I’m genuinely curious.
Or: kids who started early with crypto with no idea of wealth and worth of a coin. When you habe thousands of coins. Giving out one isnt that expensive..
I think for some of them it is just next step in the crypto investment/gambling. The current hotness in making money by flipping tokens after ICOs... With all of the usual FOMO and so on...
> The most plausible conspiracy theories I've heard is that the big sales ($1 million plus) are wash trades, ("sell" an object to a confederate for 500 ETH, then they transfer the money right back via another route) and some classic money laundering
I'm not sure if the link between NFTs and money laundering can be downplayed as conspiracy theory. Even yesterday Reuters published a newspiece on NFTs being auctioned by the likes of Sotheby's, and where crypto-rich buyers pay NFT auctions with crypto, where a cryptocurrency lawyer was quoted as pointing out money laundering via cryptocurrencies was a "known fact."
Using NFT transactions to launder money isn't exactly a novel idea as the art world is dominated and driven by money laundering schemes. In fact, in Mexico the art market tanked 70% once the Mexican government passed legislation requiring more info from buyers, because it's believed Mexican cartel rings were behind these transactions.
> The people that make separate higher standards for crypto are ignorant about how the thing they respect works too.
Not really, it's actually the other way around. Whataboutism aside, crypto proponents somehow try to maintain a cognitive dissonance of how crypto is designed to be unregulated and out of government's reach and at the same time show a kneejerk reaction to any comment on how crypto is used to perform transactions not allowed by regulation controlled by governments such as securities fraud and money laundering.
I think it is a combination of The Greater Fool Theory and fear of missing out. If you missed out on Bitcoin, now is your chance to ride the next wave.
I think you have to look at art and collecting art in general to get an idea of what is happening. When rich people spend big money on art, it is less about having a nice painting and more about things like flexing wealth, tax avoidance, being part of the provenance or whatever. People think that the most expensive painting ever sold, Salvator Mundi, which sold for ~450m, is sitting in storage somewhere in Switzerland. You also have to consider that for these people, it isn't actually a lot of money for them. They are the foundation for the mania that dogpiles on top.
These early NFTs are going to be like the early works of an art movement, and the iconic ones are probably going to be valuable to some degree just because of their place in art history. The art world has probably been waiting for the next kind of innovative movement to come along too. It is sort of a self fulfilling prophecy in that the ones that are bought for absurd amounts of money create the buzz that solidifies them as iconic pieces of the movement. Most will probably end up being worthless.
Art NFTs are like a tiny proof of concept of the idea of NFTs having value. The space, like crypto, is like a sandbox of primitives and people are just figuring things out, throwing everything at the wall and seeing what sticks. That creative environment is probably alluring to people in boring dev jobs who have the financial flexibility to explore. I think it just looks stupid to many because it is basically a completely chaotic wild west where basically nobody knows what is actually going on in terms of a big picture, and so much dumb stuff happens which the media loves talking about for clickbait so that is what everyone sees and uses to form their opinion of it.
You don't hear about the bagholders stuck with their expensive receipts of their CryptoKitties being unsold for years, nor do you hear about the thousands of dollars of gas fees spend on approving and buying these NFTs.
A lot of manipulation happens in the NFT markets which creates the illusion of a marketplace that has 'value' in NFTs that are downloadable. It is either for money laundering purposes, artificially creating volume in a NFT collection or both.
There is a tiny subset of NFTs that have value and utility, but the ones that are downloadable or are audio, videos or image-based ones do not have any value, hence the NFT misconception post.
The definition of value here is what someone is willing to pay for it. If no one is willing to pay much for a CryptoKitty now that was worth a lot in Dec 2017, that means the value has changed because the market has changed.
The parent says that they don't see the value in current NFTs. I tend to agree that I don't agree with their current values. But I also don't agree with the proven value (at public auctions) of baseball cards, original NES game cartridges, the vast majority of sports/concert memorabilia, most fine art, etc. But then again, value varies from person to person because we all make priority and value decisions about what we are willing to spend our scarce currency on. Some people are able to make vastly different choices about their NFT purchases because they have vastly different wealth than I do.
Also, CryptoKitties are an interesting choice because they total number of kitties grows as owners breed theirs. The number of CryptoKitties has grown a lot since Dec 2017. Most NFTs I have heard about have a limited run.
Think about collectables in the real world, and imagine how they could possibly work in the digital world. For example, people collect trading cards for various sports, and there is 1 owner per card who can trade/sell the card to others. How would you facilitate this idea in the digital world?
Well you can't use a regular database, because it's easy for it to be hacked/shutdown, and if it's run by a third-party then even if you have entry in that database you don't technically "own" it. Turns out blockchains are a good solution for facilitating the idea of digital ownership, it can't be easily hacked/shutdown, it's run by the community, and if you own the keys to the NFT token that represents your ownership, technically you own that "database entry". You can easily sell/trade your NFT to others via smart contracts, transferring the ownership of the collectable/object they represent. The market has decided that NFTs are a good way to represent digital ownership based on the technical solution.
Want to see a successful example of the trading card world gone digital with NFTs? https://nbatopshot.com/
Except, in many cases the value isn't derived from simply owning something when it is still publicly accessible and can be copied and reupload with many people claiming original ownership. Imagine Hollywood movies in the NFT space where anyone can access them for free and share then for Profit. , or the platform where they are hosted might shutdown. And while you might in some legal sense still have rights to something you'd no longer have access to something the courts haven't really got the involved yet so there is very little case law. It would be like going to judge and saying you own something, and someone else says but they share it for free on the Internet. It would be like movie studios bootlegging their own content
I’ve unfortunately forgotten who it was I saw making this argument, but: why would you want that? We, as a society, finally figured out how to eliminate scarcity of (most forms of) media. New works are being produced at unprecedented rates. What is the social value of reimposing scarcity, beyond an appeal to our (possibly culturally instilled) desire for exclusive possession?
Steam manages to have digital trading cards without blockchains. And I'm pretty sure pokemon and magic the gathering do too, although I am less familiar with them.
Whilst there is definitely a security risk with high value digital goods, I'm not sure that it is solved by the blockchain.
This is how I understand it: Baseball cards sell for millions of dollars.
Do those cards provide ownership to anything or anyone? No. Are they signed by the original players? No. Do they give you any other benefit? No.
It's just collector items that refers to something, and there is a limited amount of them. But that's basically it.
Now you could argue that you can hold a card in your hand, and an NFT not. But that is not where that crazy value is coming from.
I'm not claiming that NFT's value is justified, I have no idea about that. But to me it seems like a "collectors" thing.
Because let's be serious, nobody in their right mind would pay millions of dollars for a freaking card with some baseball player at the front. Same goes for NFT's.
With an NFT you own a token with a link to a resource, but the perception is that you own an actual artwork. Think is, the artwork (e.g. a jpg) can be copied an infinite amount of times. So the baseball card analogy falls short, at least as far as the posession of an actual item.
The baseball card also doesn't give you ownership of the baseball player, or over the photograph or stats of that player.
You can copy the photograph and stats as much as you want (the player not so much ;)), but the card still stays the card.
So conceptually: the NFT doesn't refer to the baseball card, it is the baseball card. Baseball card refers to something real, but doesn't take ownership of that thing. NFT refers to something real, but doesn't take ownership of that thing.
I think I might be close to getting it. But with a baseball card, I control the baseball card. Right? With the NFT, I have no control over the resource linked to from the NFT. If that server goes away, doesn't the thing that provided NFTs its value also go away? Its like if someone scratched off the photo from my baseball card, doesn't that baseball card become valueless at that point?
Continuing with the analogy you can own a rare baseball card of an all star player but many other people also own it. With NFT there is (usually) one and only one owner so it’s like there is only one card that have been produced. For instance check what they did with the NBA and dunks. They are selling short videos of every dunk. So there is only one possible owner of a dunk sold. That’s it. So only one guy own the one of the best dunk of Michael Jordan.
That feels like these websites that have a list of stars with names associated with them. Sure, people do pay to be in those lists, but it feels a bit scamy.
NFT and baseball cards are both pointers: they point to something you don't control. You control the pointer, not the thing they point to.
So if we can agree that the card has value because "it's about Honus Wagner", and not really about the picture on the card, then NFT's and those cards are very similar.
But on the other hand, you could indeed claim that the card has value because of the picture itself.
But I still feel the picture on the card is really to act as a pointer, and not about providing value in itself. Because I would think that in that case, a real picture, or a bigger picture, or the original photographic film would be worth more.
So in the end, the baseball card also doesn't become valueless when the player dies.
That is just a bad implementation of NFTs. Take a look at the Flow blockchain for example, which is probably the most famous NFT blockchain out there. They store all metadata in the token itself.
It's not fair to discuss NFT's by only looking at a bad implementation. Metadata is stored on-chain.
1. Ownership of the "original" - why do you pay so much for an original painting when you can buy cheap/free knockoffs?
2. Flexing - look at me I bought an expensive NFT, look at me I own this and this NFT (just like sports cards, pokemon cards, etc.)
3. Money laundering - cleaning dirty money through NFTs.
4. Legit investment / value store - if NFTs picks up more and more (see Reddit, Twitter implementing NFTs), it's a legitimate investment strategy, just like BTC or ETH
5. Hype and FOMO - why do people buy Supreme branded products? Why are lines at Apple stores when a new iPhone is released?
Like any other coins, it's simply a note useful to figure out who owns what within the framework of the community.
NFT's connection to art is just a way to put a face on new coins. Instead of creating a sum of a coin brand and trade those(HN coin with total of 100K coins), you create a new coin brand each time(The most upvoted post, the post that made something famous etc.) and trade those with each other.
It looks like a solution to the problem of early adopters having all the wealth. BTC up %10 or even %100 doesn't mean much, the crypto wealth was created by investments having %1,000,000 returns. Memecoins, NFT etc. serve the purpose of being able to bet like it's the early days of the BTC.
The misconception of "selling JPG's for millions" appears to be as a result of thinking with the pre-blockchain mental models. I know a few people trading and chasing NFT's and none of them are into the art part, they are into the trade part and they are trying to buy NFTs that they expect to sell for a better price later. Their criteria for buying NFTs revolve around things like size of the community interested in it, promoters having the blue badge on Twitter, the age group etc.
Define owning. Depending on your definition, it may mean or may not mean owning. In the NFT circles, the record on the chain indicating that you own something means you own something because ownership transfer will happen within the exact same framework.
NFT is not a media to purchase rights of an artwork to print it t-shirts or something like that. These things happen within the legal framework of a jurisdiction that has legislated stuff like copyright. Blockchain is not a jurisdiction, it's simply a list record and those records are valid for those accepting the blockchain as the authoritative record.
If you have to have some odd local definition of ownership you’ve already lost and know it!
Compare it to physical art. If you buy physical art you take control of the object and can do what you like with it including keeping it locked up in a customs warehouse.
If you buy a token you own the token not anything it points to. You can do what you like with the token but not what it points to. You own a link.
The stuff you describe about physical art is only valid within a jurisdiction that has legislated ownership of physical items. You can very well take control of an object without owning it and lock it up in a custom warehouse. You can be custodian of it if the legal framework allows for that, it still can be yours of someone takes ot from you physically. Depending on the jurisdiction, it is possible that despite you paid to own the physical art piece, you are still not allowed to take photos of it in purpose to reproduce the images of it. You may own it but maybe you can't break it down or take it away from its place.
These are all constructs that societies had it differently and it's all matter of legal and political processes.
There's no inartistic ownership, it is a social construct that happens within a community.
The blockchain doesn't operate within the traditional legislations, ownership within a blockchain means people who use it accept the record as true. If it says that you own it, you own it(within the community of people who use blockchain).
Things being a social construct doesn’t mean their definitions lack solidity. Particularly when defended by force through mutually agreed frameworks like governments and legal systems with their own mutual agreements inter-jurisdiction.
All you do when you use a local definition is note that you’re going against the established definition by society, enjoy none of the protections and muddy the waters for people who don’t know you have a peculiar definition. This happens a lot in blockchain communities where ownership, trust, decentralisation and other terms end up being a lot more local in definition because the whole house of cards gets exposed if you actually look at things more neutrally. It’s a bit cult like in that respect and interestingly a lot of cults have odd ideas about ownership as well.
Yes, blockchain stuff don’t abide within the established definitions in the society. In fact, that’s the main value proposition of it. You own certain amount of coins or NFT not because the legal framework allows it but because the software that interprets the blockchain says so. it’s distributed nature makes it a societal construct within the society that uses that software.
To own anything in the blockchain in the traditional sense, there needs to be a legislation for it and I’m not aware of any. The point is though, it doesn’t matter.
Actually the ownership of the coins and tokens does fit into established definitions. Hence why it slides into legal frameworks quite nicely and we see taxation, prosecutions and so on based on that ownership.
It’s just the ownership of what the NFT points to doesn’t.
No it doesn’t but it seems like will eventually, that’s why it’s a debated topic the last few years and varies from locality to locality. Legislators may eventually legislate the NFT too.
Pull the other one! You can literally see legislation that impact NFTs going into US law this week and confiscations of crypto-currency from criminal cases as well.
The crypto crowd doesn’t like it but it’s not because the understanding of ownership of the coins and tokens is different. The art a token points to on the other hand.
Put it this way I absolutely think people that own an NFT own the token and owned the currency used to pay for it. I don’t in anyway think they own the art it’s supposed to represent.
Just as Afghanistan recently outlawed foreing currency use and that's Afghans' problem, this is also something US citizens should deal with. Spoiler alert: Most people in the world are not US citizens and don't live in the US.
The ownership of the underlying asset depends on what you understand by ownership.
Anyone can claim ownership of anything, NFT or not. That's why there are lawsuits over ownership of property and wars over disputed territories.
NFT ownership concerns those who engage in the community, just like Bitcoin concerns those who are engaged with it.
What is Bitcoin after all? A transaction record in a distributed ledger. Exactly the same thing as NFT. It exists only because someone said so in a community that use software with the same algorithm to parse transaction records(the ledger distributed as a blockchain).
> NFT ownership concerns those who engage in the community, just like Bitcoin concerns those who are engaged with it.
NFTs don't just get to sit aside from society though. Both as a community and in terms of redefining things like ownership. As we can see in this very conversation.
In some cases NFTs actively embrace regular ownership models. For example Meebits where they very pointedly do not give you ownership of the art, it explicitly remains the property of Larva Labs LLC. And in fact your rights to the use of their IP with the Meebits you buy are extremely limited. Similar is true of cryptopunks.
This has been a fun conversation and you make some interesting points but I'm done for now.
The point is that ownership is a made up concept, albeit a popular one.
Also, it’s very complex and definitely not a clear cut. For example, you can’t simply process the plastic disk you bought, called Music CD, and share the output with everyone, you can get into real trouble.
You can buy a plane ticket but whether you can give it back varies and you can almost never sell it, despite owning it.
You can own one aspect of something and not the other, for example you can own the right to make toys from a character but not the rights to make a movie.
You can own a Databese in Europe but can’t own it in US. You can own software patents in US but not on the Europe.
You can buy a very old house in central London but you can’t demolish it just like that and build something else.
In some places men can own women, in other places white colored people used to own dark colored people.
In some places you are allowed to rent your body for certain purposes or inject whatever you want to yourself, in other places you can’t do a lot of thing to yourself.
Also, the way you acquire your possessions is not a clear cut. Purchase is a common one but you can get things by participating or organizing mass murder, a common practice known as “war”.
You can also acquire things through inheritance, a popular option but not a clear cut too because the inheritance rules can change depending on your gender, age, race, nationality and the jurisdiction.
You can own a Gmail or HN account that you never bought and can be taken away at any time.
As you can see, ownership is a complicated concept. You can’t really pin down a property of ownership and say this is the test to determine if you own it or not.
NFT is just another complication but this time enabled through international computer networks(traditional communities would create registers and institutions to deal with ownership management).
I think ownership is about control. It can be direct, like owning a baseball card, or indirect, a legal contract with a company like Amazon to maintain servers. NFTs fail on giving any control except on the blockchain. So the actual object for which we are trying to establish "ownership" can disappear against your wishes. It is not like owning a baseball card, more like owning a receipt of purchase.
Yes that is not in question. What is in question is what is the utility of the NFT? From your answer it seems like its just to be an NFT. What good is that for? Maybe try to address my baseball card vs purchase receipt analogy to make me understand better.
In practical terms, the main utility is that you can trade it. That's what I've seen from people who buy and sell NFT.
They do have some other rationalisations, which I don't buy(yet). One is, it establishes your identity in the virtual communities. For example, you can buy an NFT for 1 million dollars and be known to be the guy who bought that NFT for 1 million dollars and hangs with other people who also bought expensive NFTs.
I don't know if this works, the person who made that explanation to me doesn't really engage in that kind of communities and could not provide me with an example where that happens(someone else mentioned Mike Tyson being involved with something called cool cats and supposedly, he was hanging out with other owners of that NFT class but I was not able to confirm this). She simply sniffs around, finds NFT's with a lot of hype, buys some and sells for profit.
The NFT collectibles are where the action is. These are more akin to trading cards than expensive one-off art in a gallery that may have made headlines earlier this year.
Imagine that its the same trading card pools of capital that would have bought collections at MSRP, what would the seller’s annual revenue be? There had been no transparency in that. Instead, imagine if the seller only did a single set and everyone could verify that was the only one, the same amount of capital is squeezed i to that one set, which would push the price up. The issuer here makes more money from royalties when people trade pieces of the collection, instead of needing to continually issue that collection.
If NFTs as deed to art isn't convincing for you, check out ENS. https://ens.domains/ It's a name registrar that's a smart contract. Each ENS domain name is an NFT.
May be a dumb question but how can we certify that the same asset doesn’t exist as two or more NFTs on different block chains. There are tons of them and each can have its own monalisa.
> how can we certify that the same asset doesn’t exist as two or more NFTs on different block chains
You can't. But surely some wise guy is pitching a blockchain for that right now.
It's actually worse, the same certificate could exist on multiple blockchains, and none of them guarantee approval by the original artist; all could be legally void certificates of nothing.
It's a good question. In practice, a project will publish the official contract address and the chain on their web page.
Hence, it becomes a schelling point for users. It assumes that the project owners are in control of their servers and DNS. For users, there is then just one official contract, regardless of how many others are published and on different chains.
As an aside, there is ENS, which people are starting to use to say they own a DNS domain https://docs.ens.domains/dns-registrar-guide. ENS itself is an NFT, so it's turtles all the way down.
Ownership of digital goods does exist since blockchain technology. You can now proof that things existed at a given time and that you are the rightful owner. That was not possible before without a middleman.
Incoperate that to YouTube. At the moment millions of channels steal video revenue from their creators. If it would be accepted as proof that you where the first uploading this video, ownership can be proofen in an instant without lawyers.
No its not. What you miss is that the creation of the signature is stored in the blockchain. So the creator can proof, that the signature existed before the other signatures. If you modify a video, your signature would have a timestamp AFTER the first signature. Proofing that this is a modified version of the original content.
Going a little bit further, modified versions of videos could be signed by the private key of the creator, proofing that the modified version was published with the consent of the creator.
This doesn't require a middleman, even pre-blockchain.
Proof of Ownership of digital content has existed for at least 30 years; digital signatures were a feature of PGP.
I could host the original video (original quality before upload) on my own website, link to / host my PGP public key, host the content digital signature on my website, then post these links in the YouTube description after I upload it there.
NFTs don't always identify the owner publicly by their real world identity; typically the blockchain only proves that a particular wallet id owns the content. Hence, there is another link in the chain to be proven for your use case. PGP doesn't necessarily fix this either; it only proves that the digital key pair own the content, not an IRL identity.
Sure but you miss a point. The blockchain proofs the creation date which pgp can not. So when you have the first signature of something, you can proof that you are the original creator. This ofc implies that everybody would use this method as proof of ownership.
I only know a cursory amount about Namecoin. That it was built on Bitcoin, but somehow failed. ENS is actually working, and recently launched their DAO for governance.
This topic turned up a week ago. [0] Personally I like the analogy to baseball cards. From [0]:
> Owning an NFT generally doesn't grant you copyrights over the underlying work of art. Owning a baseball card doesn't mean the athlete now works for you. They can both still have value as collectible items, if that's something that interests you.
However with a baseball card you do own the card. With an NFT you don't even own the digital item, nor is it intrinsically associated with a blockchain entry that you can prove ownership of. You basically own a link to a url which for some period of time will hopefully point at the jpg (or whatever it is).
With the baseball card you own a particular print of an image. Doesn't grant you any rights over the original image, there are many other copies of it, the image can be reproduced at will by anyone, etc. It's not that different. The card might be signed by the athlete, in wich case it gains value, but that signature might be a forgery, etc. Collectible NFTs is like owning just the autograph bit.
K, taking this analogy further, I guess if you imagine a card with no real value except for the player's signature... except instead of signing the card, the player signs a scrap of paper that you then tape to the card.
The analogy that helped me understand it (even though I would still not buy one myself and think the hype is way over the top):
Think of a booth at Comic Con, where an artist hands out signed copies of their comic books. The comic book itself is nothing special, but the signature is. But there is a problem: if you ever want to sell the signed comic book, how do you prove it's a real signature? NFTs solve that problem.
Sorry, I meant it solves the problem in digital space.
But even in offline space, the artist or seller could transfer an NFT to your account. You could then verify its authenticity (or even before the transfer).
Yeah, but I can’t sell you the PDF because I can’t prove that I’m selling only to you. That makes the PDF useless to sell on.
An example of something is the fact that I am a vim donor and a neovim initial backer. I really like that I’m in backers.md. If they would have handed out NFTs for backing, I would have loved that too.
NFTs aren't a novel solution to digital signatures.
They do leave a public audit trail in the blockchain/ledger, so potential buyers can know how many authorized copies of the asset there are (at least on a given NFT platform). That is generally an improvement over baseball cards (which may not have accurate manufacturer-supplied print counts).
Personally, the only value NFTs currently provide in addition to say PGP/GPG digital signatures are features similar to joining a country club. When you buy the right NFT, you can opt to schmooze with other owners of that class of asset (celebrities, sports stars, etc). I suspect governance or additional smart contract features will provide more benefits in the future, but they may also come with SEC/CFTC oversight so they may also come with more drawbacks.
Ah but I can’t transfer it without the artist having to be involved. And so, in practice, I can’t transfer it because that adds too much trouble for them.
You could sign it forward. Slightly harder to validate, but maybe if the original PDF included your key - that should maintain a clear chain of custody on the PDF itself.
Oh for sure. And the existence of the signed on copy with a timestamp can invalidate later signed copies, etc.
This is just a mechanism that provides that in a general way.
It’s sort of like, how, before Uber you could call up the few cabbies you had who you liked and get a ride but having Uber was a game changer anyway because the friction fell below some threshold.
I think a lot of it is to just support artists. A kind of charity from universe for artist to continue doing what they are doing. People who are making big money on NFT are already established artists. With physical art, artist sells it once and has no idea where it is. With NFTs, artists can set up royalties for every sale. With block chain, if you can verify address of artist then as a buyer you can guarantee that you are buying original work and also ensures that all (or some during resale) money goes to artist.
To me that assertion, albeit convenient to paint a rosy picture, doesn't make any sense. No one needs a convoluted technical scheme to support artists as donating cash is easy and effortless. Buying the rights to a work from an artist also does not require a convoluted technical scheme, and considering that NFTs haven't been used to enforce any right then that hypothesis is also highly dubious.
What NFTs offer is the ability to perform transactions, and ones which don't have any artist or provenance in consideration.
There is little spiritual or foolish in this. When you solve a problem in a creative way, be it a cool application of an algorithm, a feature, a product, a clever bug fix, a clever marketing campaign, new way to raise money, etc, you get rewarded.
>ERC-721 is the standard that dictates how one should create an NFT. Each ERC721 NFT must have a tokenURI field, that is an external link to a JSON file stored on an external server ... You can notice the image field, which is a link to an image.
Not just a link, a link to a link! And when that server goes down next year, all those JSON files will vanish.
> But it would cost too much of added gas fees and the average user wouldn't understand the difference.
Reminder that this a poor line of thinking.
The average user of a smartphone has no idea how it works. The average user of software has no idea how their apps work. The average user of a blockchain doesn't know how it works, and they won't need to. This stuff gets abstracted out and developed enough to hide these details over time.
I might have worded it poorly, but I completely agree with you. I was just trying to offer an explanation on why this isn't implemented more widely although the technical solution exists.
Some time ago I worked on a proof-of-concept service to enable users to mint their NFTs while abstracting away all the complexities. I decided to go the same route (link only, no hash, no nothing), as the cost for NFT minting are already very high as it is (see https://nuftu.com/pricing for current costs on the Ethereum blockchain).
> But it would cost too much of added gas fees(...)
If your goal was honestly to just buy art, why would "gas fees" matter? They only matter in a scenario involving wash trades and high rates of transactions involving small deltas in price.
Look, I'm not trying to defend NFTs here, but let's view this from an artist's perspective that wants to hop on the bandwagon:
you either pay around $70 to mint your NFT without caring about how and where your image is actually stored, or you pay $20,000 to upload your 500kb onto the blockchain (as the article mentions).
But you get a baseball card that's pretty hard to perfectly duplicate, not a link to a digital picture of a baseball card, which can be copied at virtually zero-cost, and where you have zero control over the hosting of that picture, and can be replaced at any time.
What's the point of 'owning' a digital baseball card if anyone can download it and store it on their PC? There's only one Mona Lisa, it only hangs in the Louvre, you can't just have an exact copy of it at zero cost.
It's make-belief ownership. The only viable application I've seen is digital licensing, for non-free software or digital assets. This can work in a closed-garden system, like in-game assets, software licensing, ... where you don't have control over the environment you're in, but cannot work on an open internet. But anyway, the gas-cost on eth is WAY too high ($70-ish to mint?) for this to be actually used for these applications, and if you're in a walled-garden anyway, who needs decentralisation?
Please stop with this ridiculous comparison. I can hold a baseball card. I can look at it. I can put it on a binder. It's an object of appreciation, like a painting I hang on the wall. It is tangible. NFTs are nothing but an empty concept which seduces programmers with a weak grasp on reality. It's fairy dust, or an eunuch's cum.
NFTs are magical thinking, occultism for programmers.
So you would pay thousands of dollars for a stupid baseball card? That is just ridiculous. Just as ridiculous as paying that much for some pokemon card or whatever. Pokemon are not real you know.
But people pay that price, no? Just as they do with NFTs. So who is to say how they should spend their money?
But it is an apt comparison. NFTs collectibles are a subset of the NFT technology use, and are similar to trading cards. There are two generations of people that don’t care about holding something to determine value so how is that a line in the sand.
They are not similar enough for the purpose of validating the intrinsic (as opposed to strictly monetary) value of NFTs.
Only a subset of people purchase baseball cards (or any collectible for that matter) exclusive as an investment, and even if I bought Action Comics #1 mostly due to its monetary value, it is not just a token, it is an actual artistic object that can be appreciated for it's intrinsic and historical qualities.
Does the same can be said about NFTs? I don't even know what an NFT is, objectively. A string of bytes? If so, does people appreciate its binary code or whatever? Whatta fuck is it? A virtual contract that states you own real state on the third moon of a planet that does not exist?
No, collectibles are not an apt comparison, and this argument only serves to show how its proponents are detached from reality...
Besides, even the generations you mention usually purchase things that can be artistically appreciated somehow. If I purchase a Fortnite skin, I'm purchasing the ability of having that skin applied to my character. It is something I enjoy looking at, having the knowledge that others can look at it as well. I cannot hold it in my hands, but it has some kind of existence. NFTs are not like that at all. They're like contacts in which the only guarantee is the payment one can collect.
But I suppose even programmers need a mysticism...
The irony being that Fornite skins are an even closer analogy to NFT collectibles. What you described is exactly why many people collect NFT collectibles. With Fortnite skins, the aesthetics, price, clout and access derived are completely beholden to the continued scarcity of the skin as well as beholden to the organization for its continued existence and use anywhere, both of which the organization can modify at any time. The NFT version of this skin has a very transparent and immutable (when properly crafted) supply. The issuer cannot change, and even if they attempted to the market knows which one is the original by earlier time. In a game or metaverse, the NFT version of the skin can convey access outside of that game/metaverse, and be applied as skins in other games, or be used to prove ownership to convey access to physical world events of other metaverses. This is exactly what is happening, right now, right this second, and for months, and what people hoard existing NFTs for and buy new NFT drops for.
How is a skin the same as selling a contract for something that does not exist? A skin can actually be used. Besides selling it, what is the use of an NFT?
The NFT skin inherits all the capabilities of the skin, except that the database entry cant be modified. You are a programmer right? Do you know the concept of inheritance in programming as it applies here. The market finds value in that assurance.
I think you are bringing a lot of inaccurate preconceptions to this concept, there is an opportunity to erase what you knew and look at the concept from this lens: does what I say work? Is this what a portion of the market is doing? If yes, thats all you need to know. Look for those NFTs and ignore the other NFTs.
> The actual distinction is: a skin is something you use. An NFT is not.
Is your assertion capable of being proven false, like for you to change your assertion? From where I sit, it only takes 1 person to use an NFT for your entire perspective to be invalidated, but it's not clear to me if thats satisfactory for you.
On the off chance you rely on an unfalsifiable view then this is only for anyone else passing by:
NFT collections were used during the NFT.NYC conference last week for access to exclusive parties that were not coordinated by the conferenced. Owners of Bored Ape Yacht Club NFTs were able to prove ownership for access to an actual yacht. Many corporate entrants to the space are aiming to replicate this. This will conitnue happening, it will happen at Art Basel, and some people are willing to forego other luxury status items to purchase the relevant NFTs for status and access instead.
If one were to move a goal post, would we be debating "use" here? I'm not sure.
In the digital space, people use NFTs every at high volume, with games like Axie Infinity having people earn access, and skins and upgrades for characters. Which can be traded off platform because they were NFTs being earned or generated (minted).
Hey dude, I know we're on Hacker News but there's no need to come at people with logic fu. There's a rhetorical dimension to language. You can't really "win" like that, were debating, not playing fallacy UNO.
I think it's pretty obvious that when I talk about NFT I'm not referring to all possible uses of the underlying technology, but rather the subset of its uses that is currently mostly associated with it: the selling of empty tokens which have no meaningful connection with the concept or artwork which determines their value.
Again: rhetoric. Semantics. Not Hacker News strong suit.
Baseball cards used to come with a purchase of a real product. They were an incentive to buy actual things. People collect them now, but they didn't exist on their own back then initially.
There’s a popular genre of NFTs which consist of a recording of some physical object (often a painting) being destroyed. So perhaps we should create an NFT which represents the stranding of other NFTs through hacking. We could upload the logs from the shell showing us deleting everything.
I honestly thought they had some kind of torrent pointer. I dont have a deep understanding of how ANY of this works, i just figured smarter minds had ironed out the kinks, such as 'what if the original source goes down or is coopted?'
I looked at mooncatparser and it just hardcodes all possible 2-bit art as a big string array constant at the top of the JS file. Definitely not "on the blockchain". The part that's stored on the blockchain is the index into the big string array.
Good job reading the code! It's as you should do when looking at a project.
Is there a way where the image can be replaced with another based on the scheme? I didn't see any, which achieves the same result as putting the image on-chain.
So how exactly is the "gas money" calculated? I was led to believe it was expensive because putting all that data into the blockchain costed a significant amount.
Asking because, wanting to verify whether NFTs were really a scam or scheme instead of just following heated Twitter arguments, I looked into uploading my own NFT. Gas money for a single image was $250--estimated earnings for an NFT are in the low dollars for most people, so it certainly wasn't worth it for me. I told a friend how insane the price was and went back to attempt the process once more a few minutes later to get a screenshot showing him I wasn't lying--gas money for the same image was suddenly over $800.
I can't think of any reasonable way to justify such costs if it's just encoding a few bytes of text and not an actual image, so now I'm doubly suspicious of how these costs are actually calculated. It reminds me of countless other schemes where you put in a bunch of initial cash to "start your own business", then spend the rest of your days desperately trying to find buyers.
If you’re like “well those costs are ludicrous compared to the computational complexity” then you’re right. But then the entire thing is secured by the ludicrous overspend of power through computation.
The gas fees are a constant, so you pay a certain amount of ETH to mint your NFT. You don't upload any image data but solely the address (so a couple of bytes) of the owner.
The reason that this costs so much is the exponential increase in ETH prices in the recent years and the network congestions (gas price depends on the workload of the ETH network). What used to be a couple of cents or so is now easily $70, depending on the ETH price and network congestion.
NFTs are such a sham to claim fake "ownership" of an asset. All the images/files are public anyways.
Nothing stops me from creating another blockchain and call it NFTv2. And then I can create an NFT which points to the original asset. Its just as legit as the Etherium one.
Or just change the link to the same file and create an NFT on the Etherium blockchain.
You can also copy and set up your own land registry and say it's all yours. Yes, it's all a social convention, like all property. If enough people decide it's "real" then it is.
You can't copy and enjoy my property for free, you can copy and enjoy an NFT for free.
If you were to get the new Land Registry enforced you would have to change the law, in which case the blockchain is no longer needed since the idea and enforcement of ownership is centralised with the government.
> You can't copy and enjoy my property for free, you can copy and enjoy an NFT for free.
Your wording here makes it seem like you confuse the NFT (the pointer to the content) with the content itself.
If your property is an authentic piece of fine art, it can be copied/forged. An NFT doesn't prevent unauthorized copying; it only asserts ownership of the official copy, similar to a receipt of the transaction (which must be publicly and immutably stored and displayed in public).
The "NFT" is not the property itself, hence copying is not of the NFT itself; it is a notary's public assertion that a transaction of the asserted property (URL) happened.
I agree that NFTs don't solve the issues you raise in your second sentence.
NFTs has nothing to do with ownership or uniqueness of the image itself. It's all about bragging rights that you bought something that was minted by X.
All the trading hubs like OpenSea are centralised to the point that some NFTs will get blacklisted if a famous enough person in the community gets scammed out of theirs.
I haven't studied NFTs but I will admit I had an misconceptions that the low pixel art NFTs purpose was that it was able to be stored on the chain itself as "it's own thing" or as a representation of a "bigger piece".
My question would then be.... why the lowres pixelated NFTs if they are being hosted somewhere else?
The longevity of many NFT projects is a real problem. This is why we set out to create the Smarts platform. The platform combines smart contracts with generative arts (smart arts, abbreviated into Smarts). Smarts is a new platform where the entirety of the artwork is stored in, and computed from smart contracts with no external dependencies at all. No IPFS, no Arweave, no APIs, no baseURI, no p5js, etc. So all Smarts artworks will live as long as Ethereum itself.
However, the EVM (Ethereum Virtual Machine) has some severe limitations for smart contracts - less than 25kb, no floating point math, limited gas amount for each invocation. So this makes it an interesting coding challenge to create smart contract based arts, it’s bearing some similarities to the demoscene.
We haven't launched yet, but you can check it out the work in progress here: https://smarts.is/
Funny to see this "epiphany" just now. Maybe one solution would be to store files on bittorrent and Blockchain pointing to a bittorrent link ? There are already multiple webclients for bt, this would not be an issue. Reliability would "just" depend on the number of peers
Website, BitTorrent, IPFS, etc all have the possibility for bit rot.
There is, however, incentive for the person who currently owns the NFT to maintain the content at the current URL or their investment would suffer a loss of value.
Is it necessarily true that the owner of the NFT has any control at all over the server being pointed to? It seems highly unlikely to me that it's universal or even common.
With IPFS you can pay someone to pin a file (or do it yourself), and bittorrent you can just seed it yourself.
But if your NFT is a URL to some random webserver (which might not be the majority of NFTs, but is not an insignificant number according to [0]), you have no control over it unless the previous owner passes along the credentials somehow. Or, they might not pass them along, and modify or delete the file because...what are you going to do about it? Good luck getting a refund.
Either way, you have to do something to ensure your investment doesn't become unreachable.
I’m saying the original minter of the NFT gets the choice to choose where the URL points. Any future owner needs to do due diligence to understand what they are buying.
If the minter or original auction house can not vouch or has no contract with the content host, the investment can suffer from an unexpected content switch at any time.
If a buyer realizes this could adversely affect the content, the value could suffer.
Lots of wash trading to bid up prices and create the impression of enthusiasm. Drags in the suckers. Like Logan Paul and his 99.9% loss on a $600,000 investment. He is the biggest fool. [1] But hey, he was in it for the tech/art right? He's still got the weird yellow robot bee thing.
I'd expect better technical foundation to sell something so expensive. Like guaranteed formats, guarantees for storing hashes, unique guarantees, some kind of image perceptual hash, some kind of P2P distributed storage for data itself. So even non-technical buyer can be sure that goods he bought are protected. Right now you need to ensure that NFT data is stored on IPFS, you need to ensure that IPFS data including that JSON file will not disappear, you need to check blockchain to prevent multiple sells (and you can't prevent someone to sell dupes in the future).
Right now NFT seems like few bytes pretending to be some kind of URL and that's about it.
Yeah. That's the shocking thing: I can understand offloading the raster data storage to various external services, but a hash is practically free to store and provides a kind of verifiability that a mere URL doesn't. Seems like an egregious oversight.
The article fails to underline that if you want anything serious you would use IPFS URIs and pin it at least once. I would say, they don't know much technically and just jumped on the bandwagon. Because the serious aren't many in this NFT area.
The NFT is a pointer to content (pointed by a URL). If the underlying content at that URL changes, the assumptions about the original NFT minting / first transaction change.
Bundling a cryptographic hash with the original NFT assertion of content accurately describes the content the NFT was intended to be minted for.
Example analogy: an NFT is like a receipt for a baseball card signed by a player. If the NFT is minted when the URL to the content points to a baseball card for Player A (popular player rookie card), but someone hijacks the domain or the URL and changes the content of that URL to Player B (no-name player who only lasted half a season in the pro league), that hijacker has performed a misrepresentation/fraud. The hash doesn't prevent the content swap, but it provides assurance that the content still matches the original intent of the NFT minting.
But that makes the NFT less valuable. If the content at the url changes without the hash you still have a useful NFT. With the hash, your NFT is burned when it changes.
As a buyer I would want that one less. In the fraud case adding the hash damages only me.
Without a hash you just simply trust the issuer unconditionally? And you prefer this trust over a cryptographic guarantee the content, and thus the meaning, of the NFT won't change?
Why are people downvoting this? It's a very good point: the value of the NFT is the fact that it was minted by X. Nothing else really matters and what's stored in the NFT is just fluff.
You can't rebuild the image from the hash, but you can query various content-addressed stores for the image, potentially letting proof-of-space cryptocurrency systems do double duty as both verifiable resource commitments and repositories of blockchain external data.
I mean, it's still worse than not doing any of this lol, and that's the null hypothesis we should be using. Yes, getting stabbed is better than getting shot, but maybe stay inside and fire up a nice S3 bucket.
The real problem is any proof of resource scheme immediately becomes a grey goo where folks are incentivized to consume literally all that resource wether it makes sense or not. It has no negative feedback loop. It cannot make sense.
Also, because of market pricing of the tokens businesses cannot actually leverage it (as they don't want wacky prices that vary by the minute) so you're left with, as usual, illegal content, gambling, speculation and other misc crime. Basically why Filecoin has a small rack of hard drives' worth of stored data and Chia has exabytes and exabytes of garbage - or did, does anyone care about that one anymore?
It makes more sense to just store garbage if your goal is to run a neat little pyramid scheme.
It all is really up to whoever implements it to make decisions on how secure/verifiable/reliable an NFT is.
Storing the image itself on-chain actually makes most often not a lot of sense if you think about it, but at least a hash should be required in such cases.
I believe it really boils down to consensus. If enough entities in a community "accepts" some platform/publisher as valid, those collectibles created by those entities (which can easily be validated on the chain) will have subjective value. Just like money: it's a piece of paper but enough people/companies/governments legally accept it so that paper now has a value more than it's physical components. I can print money too but it will be fake and worthless, even if I print it on a more expensive paper. An NFT is just some bits on a blockchain after all, but when enough people accept those "bits" by a particular entity, they are worth something. Sure anyone can clone/copy paste those JPEGs and mint them just as I can print dollars on my home printer, but as long as they aren't issued by an entity that many trust (e.g. A legally accepted central bank) they are worthless. Which in this case community is free to choose their central bank and currency, and change if they have the interest, creating a whole new economic system.
Currently the "value" is determined by hype and speculation. The more NFT (or whatever replaces that idealogically) is accepted into the society, the more "real" uses it will have and whatever real (non-pump-and-dump-JPEGs) use it has will stabilize its value when the hype ends.
What happens when the domain in the tokenURI expires? Or when the HTTPS certificate expires? Or when the server gets hacked? Or the server changes owners? Or the server operator just decides to abscond? Etc... this is complete nonsense.
Caveat emptor. This is no different from due diligence when making any other form of investment.
Observation: there is an incentive for the buyer to maintain the content (or perhaps even to replace with higher value content) at the URL. Perhaps NFT owners can band together to form a co-op / condo association if an NFT-content host site/domain goes down to maintain it. The next set of features I keep reading about in cryptocurrency/NFT space is "governance", which could cover this type of responsibility.
> Caveat emptor. This is no different from due diligence when making any other form of investment.
Thanks for taking the time to respond, but it's _literally_ the value proposition of "crypto" evangelists that this stuff will be around "forever" on the blockchain. When you invest in stocks or put money in a savings account there are shit tons of regulations against insider trading, fraud, etc, not to mention federal deposit insurance. With "crypto" you have nothing except a pinky promise from some developers, essentially, who say that their "blockchain" aka directed graph will be around forever!
> Observation: there is an incentive for the buyer to maintain the content (or perhaps even to replace with higher value content) at the URL.
Why would the buyer of the NFT have to maintain the content at the URL? It's pointing to an external, off-chain URL that the _seller_ chooses.
“Crypto evangelists” are right. The problem isn’t with the blockchain layer (eg the Operating System). It retains the promises you espouse.
The problem is with an NFT (an application) minted with bad assumptions. If a buyer fails to understand what the NFT is, that’s not a shortcoming of blockchain enthusiasts.
I’m not an NFT investor (I don’t think an NFT of a JPG/MP3/MP4 has any intrinsic value), but your complaint applies to any investor in any asset. Caveat emptor. A buyer needs to learn what they are buying before they can put an accurate value on their offer, so they are responsible for their purchase.
People seem to gloss over the first example (Project Memento) which I think is a great example where NFTs make sense. It's just a configuration with a fixed value (the coordinates) and a dynamic value you can actually change yourself (the letter). Other apps and games can use the same NFTs to build something different based on the same coordinates.
Let's say I build a war game where Project Memento NFTs decide ownership of land on map. The blockchain is an open API and players just need to connect their wallets to my game in order to play. HyperDragons eating CryptoKitties to grow stronger is a good example of one app using NFTs from another.
Art NFTs on the other hand are more like digital signatures. It doesn't really matter what is stored in the NFT. What gives it value is the fact that it was minted by X (where X can be an artist or a service). Yeah, you can use IPFS or store a hash but what's the point? You're buying the bragging rights, nothing else.
Would anyone buy a house if the proof of ownership was a URL to JSON file on a server you didn't control, with no regulation of the blockchain that the "proof" resides on?
I will genuinely put effort in to starting a company that provides a blockchain proof of real estate ownership if this ever happens, just so I can fraudulently sell everyone's houses while they live in them after a few years. It'd be hilarious.
I have not seen any compelling project successfully bridge analog world content with digital signatures for blockchain purposes. These things always seem to require some trusted party like a government to support them.
That said, I suspect something along these lines may some day be the "killer app" that NFTs/smart contracts need but are currently missing. The scarcity of atoms combined with the public, immutable digital records on a blockchain ledger. Too bad we are 12+ years into the blockchain and I've yet to see a compelling use case.
The misconception seems to be that people think the owned content is inlined in the blockchain, when it more often is a URL in the NFT / on the blockchain. Hence, the proof of ownership is contextual around what content existed at the URL at the time of minting, which might change if the controller of the URL changes the content after minting.
