Honestly, not even bothering to solve the "double spend" problem makes this much less than it could have been.
After all, it is very easy to solve the "double spend" problem without the use of a blockchain: simply use a single trusted authority.
You know how every time you buy a house or piece of land you have to get a state-licensed notary to verify your identity, And then after signing the deed you have to send the paperwork to the county registrar because if they don't write it in their books then the land hasn't actually changed hands? That was NFTs working fairly well long before the invention of blockchain or computers or cryptography.
Trustless solutions have no place in a world with robust trust, which is most of the developed world and parts of the developing world. The solution isn’t blockchain, it’s more trust and the organizations and governance that builds that trust.
The fundamental problem with systems based on trust in humans, is that even if you completely trust the humans in control today those people will eventually be replaced, by death if nothing else.
So, you also need a system of determining succession of trusted individuals that not only selects humans who can be trusted, but humans who understand the challenge of defending the purity of succession procedure. All it takes is one corrupted transition. One person submitting to a little nepotism, to poison the entire system.
And of course, wherever you create a centralized repository of power, whether it's a hoard of wealth, a position of authority, the head of cult following, or admin access to a database, you immediately create a game for power hungry people to figure out a way to corrupt the systems in place that prevent abuse of that power.
This is why so many people are working towards decentralizing systems of power. Hell, even the US constitution is an instantiation of that, with the established separation of powers between the 3 branches of government. While we recognize that centralizing all governmental power in a single position can lead to incredible efficiencies if you get the right person in charge, it is also incredibly fragile and dangerous in the long run. We accept the inefficiencies of decentralized systems in exchange for long term stability and anti-fragility.
You can't, at least not directly. You still need the local monopoly on violence to honor and respect your claim on the property. That's why I'm personally not super bullish on the use of NFTs for property rights at this point (unlike my confidence in the place of bitcoin as long term safe store of money).
However, I could see it might be useful to at least make it obvious to the world when a centralized authority takes someone's property without their consent, and will force them to actually prove to the world why the seizure was justified.
The important thing in this case, is that while they can seize the underlying property, they can't just transfer the ownership certificate (e.g. property title) arbitrarily. Any local authority that accumulates a lot of unjustified seizures will see investment into their realm dry up, as people with money realize the risk of seizure in their realm is too great to justify investing significant money. We already do that now to some degree, but mostly through social gossip because it can be hard to prove that it's happening unless the abuse is directly touching your social circles.
Generally, the concept of trust in poor countries is corrupted by centralized institutions, mostly as a means to redirect wealth. Rule of law is meager but in my experience, land rights are one of the few that maintain (as long as someone with power does not want what you have. There are few with both power and stupid greed enough that this is a very rare occurrence).
Despite barely enforced laws, people are mostly good and largely follow rules. Human trafficking, armed robberies and kidnappings are a lot higher than in wealthier countries but it's still only a minority who succumb to that. It's mostly scams (including having a business but not paying employees) that a significant number participate in.
With property, those that have less respect each other and those that have much more also have gated compounds and private security (among which we can count having police on call). It sounds weird but in disputes, even absent an actual justice system, a verifiable paper trail or record still carries a great deal of weight.
Having suffered a lot from it, I think a lot about corruption. I've also read a fair few number of papers on the topic, from the sociological to the game theoretical.
Lack of accountability and lack of transparency are major enablers. Public blockchains are of interest because of their (pseudonymous) transparency and virtually tamper-proof nature. Not a solution but of interest. A fully transparent and neutral system or layer of payment of last resort, where the powerful cannot forge records, for use where trust is non-existent would be useful.
Came here to say this, more or less. Software, technology, science. It stands on the shoulders of giants. If I use, say Ethereum, there's a whole lot of developers I need to trust. Even if one would use Qubes, Tails, or Whonix.
I don't see this problem of trust evidencing itself anywhere in my daily life. I do not commonly consider that my bank will become corrupt and take my money, or that the county land manager will take my property because of nepotism. 90% of the websites I have accounts with haven't abused my trust in any significant way, other than data breaches.
I understand that these things are possible. But it doesn't seem worth any level of effort to a resolve a problem that doesn't occur and doesn't seem likely
You're on this site, so you're probably an economically valuable human with social connections to other economically valuable humans. If that's the case, then you're not the ideal target for corrupt people abusing their power. You would create too much of a ruckus if people in power started unfairly abusing you.
Privilege creates a bubble that can easily blind you to the abuses that are actively happening all around you. You and I often don't hear about those abuses because we humans can only really keep track of a couple hundred other humans, and there are over 300 million in the US alone. There could absolutely be millions of people getting abused by people in power who don't have the education to understand that they're being abused or the social connections push their stories out to people who could do something about it.
As a simple example, white Americans see videos emerging of innocent black Americans getting violently abused by police in a way we can't even fathom in our privilege, and black Americans are completely unsurprised, saying "yeah, this is totally normal. We've been trying to tell you about it for decades but you never believed us." Trevor Noah has a good dialog on this, https://twitter.com/TheDailyShow/status/877533496515989506
There's also an element of "everyone hates the violent young men in their community until the barbarians are pounding down the city gates". Or like Fauci said early in the pandemic, something to the effect of "if we do a good job, everyone will wonder why we overreacted about nothing." More often than not, bad things don't happen precisely because of the efforts of people assuming they're definitely going to happen, which then leads to the next generation that never experienced the bad things wondering why we're wasting effort on this thing that doesn't happen.
That is a fair point (but I'd point to the Australian Banking Royal Commission over and above Police racism if you're looking to show how financial institutions violate the trust of undereducated/underprivileged people).
I don't think crypto is the right solution, though.
If anything, it requires _more_ trust from vulnerable people than traditional finance, and without any central authority it's difficult to regulate.
I agree with what you're saying. But I think there is a certain level of risk where the "average person" can experience negative effects. Society, by definition, is comprised of average people. Until something is likely affect them, they don't care much about it.
In my personal experience this applies to politics, climate change, trust in institutions and many other "big" concepts. People I know tend to be fully focused on their families, their careers and their hobbies. Anything that won't materially impact one of those things is trivia.
This seems to be true of most humans, throughout history. I don't see mass adoption of any system that solves the problem of trust until regular violations of that trust impact the median citizen.
You don't see it because you are not looking for it. It is real, and you are, for example, being robbed of value in fiat currencies in your bank account every year due to inflation. How much you are aware and want to do something about it is the trick.
Ive had banks steal from me. Ive had companies steal from me. Ive had governments steal from me. Eventually you say, enough is enough, and find concrete solutions.
Theft? of my property? Its more likely than you think.
Trust requires us to give leverage to centralized authorities over our critical records. If you deposit money in a bank, they can unilaterally decide that you can't withdraw it today. Their systems can be down. They can be closed at a time you want access to your money, etc. Or the person at the front desk can simply not like you, and if they're the only branch in town, you're out of luck.
Critically, trust like this comes from scale. The likelihood of a bank screwing you personally over diminishes as the bank grows larger. In other contexts, people call this a network effect, and it is an anti-competitive moat. Even if we completely trust the bank, which we don't, this anti-competitive moat leads to all sorts of problems, like stagnation of service quality (look how long it took us to get same day wire transfers and decent quality online banking).
Decentralized systems democratize trust. They break anti-competitive network effect driven moats. This is a good thing, even if we completely trust our centralized authorities, which again, we should not.
1. We trust the coders to know what is best for us.
2. You can write perfect code so that our money is safe.
3. The price will never plummet.
I've observed:
1. Mt. Gox Failure
2. DAO Failure
3. First BTC price crash
4. USDT regulatory concerns
5. Lack of learning from failures
6. Politics still exist, they just moved to the coding layer
7. Willful ignorance of the scams and crimes cryptocurrencies has enabled
7.1 Because somehow cryptocurrency is better for us.
8. Hype over price security and software security
8.1 Because somehow cryptocurrency is better for us.
Trust in USDT is centralized in the corporation Tether and has none of the benefits you mentioned. Trust in BTC is hoping (praying?) that the price doesn't crash, and software doesn't control the price, humans do.
I can use blockchain apps all of my life and even if there are people (now) making billions of USD worth of Tether transfers, I never will be forced to accept it, because I don't trust them. That is exactly what "democratized trust" looks like.
> 1. We trust the coders to know what is best for us.
> 2. You can write perfect code so that our money is safe.
> 3. The price will never plummet.
Nobody is asking that. The source code is public, read it and decide for yourself. Good luck doing that at your local bank. There are plenty of stablecoins, you don't have to take on crypto exposure.
> 1. Mt. Gox Failure
Totally irrelevant.
> 2. DAO Failure
Sure, a public commons infrastructure will elicit a lot of bad projects. Just like the vast majority of open source projects are bad. This is not an indictment of open source.
> 3. First BTC price crash
Irrelevant.
> 4. USDT regulatory concerns
Use one of the many other stablecoins, then. This is the beauty of the system. It's actually open, so there are a diversity of issuers. You could even start one yourself, if you wanted.
> 5. Lack of learning from failures
There is an enormous amount of learning from failures. If you believe there isn't, you aren't paying attention.
> 6. Politics still exist, they just moved to the coding layer
Yes, this is true. However, this layer is thin, by design. That means the layers above it, which implement most of the relevant functionality, are a diverse ecosystem of choice. Contrast to the thickness of politics in other domains.
> 7. Willful ignorance of the scams and crimes cryptocurrencies has enabled
> 7.1 Because somehow cryptocurrency is better for us.
New technology brings about scams roughly in proportion to its power. The internet enabled tons of scams. Fiat currency enabled tons of scams. Coinage enabled tons of scams. And so did banks, particularly of the fractional reserve variety.
That doesn't mean scams are good or should be tolerated. But it takes time to develop the social and political conventions to deal with them. I believe that process is taking place in crypto, though perhaps not as quickly as we'd like. I think if you look back at the history of other comparable technologies, you will see that crypto is pretty far ahead of the game in this regard, though.
> 8. Hype over price security and software security
> 8.1 Because somehow cryptocurrency is better for us.
Sure. Lots of elements of crypto are overhyped. Overhype comes along with any transformative technology. See hype about carbon nanotubes, nuclear power, 3d printing, etc. Hype is an indictment of people, not technology.
> Nobody is asking that. The source code is public, read it and decide for yourself. Good luck doing that at your local bank. There are plenty of stablecoins, you don't have to take on crypto exposure.
Most people are not advanced coders and will never be. So most people still have to trust a random coder (be it close friend or someone on the news or online). If something happens to your money because someone took advantage of you in the code then good luck getting anything back. At least with banks there are laws around this stuff and you can actually get your money back. For average person this is still the way to go.
There's also a massive unregulated conflict of interest here: reviewing the source code will require experience which someone is unlikely to have without also having a financial interest in expanded use of cryptocurrencies. As we've seen so many times over from all of the cryptocurrency boosters who talked up code or services until a major problem occurred, this can cloud someone's judgement even if they're not intentionally scamming you.
That’s not what we’re talking about: if I hire a lawyer to review a contract, they’re not making decisions based on a need to boost USD to protect their ability to find a buyer.
Similarly, while they’re both fiat currencies the USD is orders of magnitude stronger (inordinately more use, links to durable value, etc.) which means that my hypothetical lawyer’s ability to shift the value is extremely small.
Even actual government officials have relatively little power this way: there are many of them and the need to get re-elected means they’re far less likely to try the kind of pump and dump scams which are routine in the cryptocurrency world, especially given the likelihood of scrutiny and punishment.
No need for pump and dump when they are raking in their money by trading on insider knowledge, getting favors from lobbyists and by getting their cushy board seats at banks after they leave office.
Really what is worse is that it will create "Software Lawyers", which are like lawyers but worse because they won't be members of a bar association, and might not have your best interest at heart.
> Most people are not advanced coders and will never be. So most people still have to trust a random coder (be it close friend or someone on the news or online). If something happens to your money because someone took advantage of you in the code then good luck getting anything back. At least with banks there are laws around this stuff and you can actually get your money back. For average person this is still the way to go.
That's certainly true. However, you have the option to learn, and the option to review it yourself. You also have the option to choose which experts to delegate your trust to. Whether or not this system is better than the system of just trusting big banks a lot with no ability to verify personally is up to you. It is, however, a novel trust model, and one that it's clear that some people prefer.
I think it's also clear that this model has advantages over the other. The traditional model has advantages as well. Neither is strictly better in all dimensions. Almost no technology is strictly better than its predecessor in all dimensions, though.
So this is like the "Software Lawyer" argument I stated above. If I hire a lawyer to review a contract in finance, I expect him to put his greed aside while he's working for me. This is well regulated, and while isn't perfect, keeps most lawyers honest.
With software there is no regulation. What happens when the software expert finds a bug in a smart contract? Is it illegal to sell the exploit? Can he exploit it for his own good? The smart contract is the contract after all.
Who defines what "conflict of interest" means? The software guy who wrote the smart contract or is it in the smart contract itself? How would I know if there's a backdoor in the smart contract if greed is the primary motivation for a software engineer, and every other software engineer I hire to look at that contract?
Yes, those are problems. Just like the existing textual contract system has problems, so does this new system. The new system is, obviously, much newer. The practices around the modern textual legal system have grown up over hundreds and thousands of years of refining practice. The fact that the crypto ecosystem is not yet as developed in terms of questions like that is unsurprising.
What is true is that crypto enables a new mechanism for doing something vaguely analogous to parts of the existing legal system. This new mechanism has disadvantages to be sure, but it also has advantages (for instance, it is border and jurisdiction neutral, the code runs the same everywhere, no matter what). I am certainly not arguing that crypto is strictly better than the existing legal system. It's not. It is just an alternative that is useful in some situations, and worse in others.
Over time, I think the domains in which it is useful are likely to expand. They are unlikely to replace the entirety of the existing legal system, of course. But I think the existence of a border neutral code layer for asset transfer and custody is a useful thing for certain applications.
There’s a difference between choosing to trust the claims of someone who you believe has expertise that would be expensive or impossible for you to develop yourself, and having no option but to “trust” a certain party in order to perform certain actions. I think when most people talk about “trustlessness” in the context of decentralized systems they’re not saying you would never trust a surgeon, or a pilot, or a YouTuber who reviews smartphones, or an audit of a computer system.
you don't have to trust anyone or examine the code -- simply watch what happens. btc as a protocol has gone a decade without any security flaws discovered or exploited. shitty smart contracts get exploited.
It's not open source versus closed source, and loss of money is never irrelevant.
It's the alignment of what I value (security, safety, government guarantees) versus what you value, which is ... well I don't know.
I feel it's one of the following though:
Decentralized trust is great for the world.
And/Or
You have a huge stake in crypto, and you need others to believe in it as well, or your crypto assets will fail.
I just can't tell whether you're in it for the money or to change society. It's fine if it's both, but your arguments justifying crypto don't share the greed angle.
I just feel like people should know who they're arguing with.
Banks are literally closed source. Crypto is literally closed source. So, yes, it is.
> and loss of money is never irrelevant.
Loss of money from centralized exchanges is irrelevant to the decentralized consensus technology. These are completely orthogonal concerns. Normal financial institutions get hacked, and they also operate ponzi schemes. The fact that this can happen to comparable centralized crypto services is orthogonal to the technology.
> It's the alignment of what I value (security, safety, government guarantees) versus what you value, which is ... well I don't know.
I think i've pretty clearly articulated what I think the technology is for. Just go back and read what i've said.
> I just feel like people should know who they're arguing with.
Of course i'm invested in it, to a degree. Anyone who believes in a technology should be invested in that technology. You shouldn't trust them if they're not, because if they haven't invested, they don't actually believe in it.
That being said, crypto very well may not turn out to be useful for the world. It enables new possibilities for social and economic organization. Technologies like that are very rare, and they are usually transformative and tremendously economically valuable. This one could be an exception, but it'd probably be the first.
Awesome. I appreciate that. That tacit acknowledgement is lacking in all pro-crypto posts.
Most silicon valley companies want to make a shit ton of money with their VC capital. They say things like, "We'll make the world better..." but that's really just what they tell themselves so they can feel better about making a metric shit ton of money. And there's nothing wrong with that since that's what drives the economy.
But it's unchecked greed that caused 2008, and that was human behavior.
If anything crypto appears to enable more bad human behavior: money laundering for drugs and human trafficking, rug pulls, stable coins that may or may not be literally printing money, payoffs for ransomware and blackmail...
At what point do you check your greed and want to solve the unsexy problems that crypto creates in our society?
> Awesome. I appreciate that. That tacit acknowledgement is lacking in all pro-crypto posts.
To put a more fine point on it, i'd say about 10-15% of my net worth is exposed to crypto.
> Most silicon valley companies want to make a shit ton of money with their VC capital. They say things like, "We'll make the world better..." but that's really just what they tell themselves so they can feel better about making a metric shit ton of money. And there's nothing wrong with that since that's what drives the economy.
This is certainly true, but I think it's a little misleading. If you actually believe a technology is transformative, investing in it probably makes sense. So the fact that VCs are talking their own book IMO is mostly just evidence that they believe what they're saying.
Certainly it's true that occasionally people say things they don't believe in order to offload bad assets on unsuspecting retail investors. And some of the crypto VCs might be doing that sometimes, but if they believed that, they wouldn't keep investing in the category, I don't think.
> But it's unchecked greed that caused 2008, and that was human behavior.
True, but unchecked greed also caused the industrial revolution, so, it has some benefits too.
> If anything crypto appears to enable more bad human behavior: money laundering for drugs and human trafficking, rug pulls, stable coins that may or may not be literally printing money, payoffs for ransomware and blackmail...
Crypto definitely enables lots of bad things. No question about that. It also enables some good things though, like the ability to safely (in relative terms) store value outside of kleptocratic and/or irresponsible regimes (e.g. venezuela).
It also facilitates a certain kind of forced transparency. For instance, let's say a country has problems with government officials seizing property deeds. The officials simply change the title and say "sorry you actually never owned this land". A citizen has no recourse here, they can't even prove the government did this, because the government warehouses all the records. If, instead, every property transfer had to be recorded on a decentralized blockchain to be considered legitimate, then at the very least any citizen to whom this happened could prove to the public that it was stolen from them. Of course, that doesn't mean they get it back, because physical possession still flows to the people with the guns. But it does mean they can no longer effectively deny it, and I think that has a lot of value in regions of the world with less trustworthy governance.
> At what point do you check your greed and want to solve the unsexy problems that crypto creates in our society?
Well, a lot of the problems crypto has created are really revealing problems that were latent anyway. Ransomware is really the problem of insecure software, for instance.
The problem of money laundering is an interesting one, and I think sort of poses a philosophical problem about event ordering. What I mean by that is that what crypto really gives people is genuine monetary self-sovereignty. Having that self-sovereignty enables money laundering and tax evasion, for sure.
However, I have to believe that in a world in which monetary self-sovereignty was the norm before the surveilled financial system (e.g. supposing crypto was created before SWIFT), we would view that sort of sovereignty as a fundamental right.
As a thought experiment, consider a world in which DNA sequencing was invented 100 years ago, and up until 10 years ago the government had been collecting everyone's DNA at birth. They had then been going on to solve all sorts of crimes with it, and probably occasionally harass protesters and dissidents and other undesirables and so on. But then in 2010 someone invents a pill that you can take that alters the DNA base pairs that are used for that surveillance (without side effects). This pill would re-establish the biological privacy that we accept as a natural right today. However, undoubtedly people would make the same arguments you're making now, that this is a great step backward in our crime fighting ability, etc, And they'd be absolutely right.
But I think the question we want to ask here is what makes sense as a set of natural rights in this context?Should people have sovereignty over their own money? Transactional privacy? If not, why should they have biological or medical privacy then? It seems to me that the lack of financial privacy is a contingent artifact of the evolutionary path of technology, not some moral truth arrived at through democratic means.
Doesn’t the entire NFT market rely on trusting that the company you bought your “certified original one of a kind URL pointing to the image they host” doesn’t cease to exist?
I’m not at all an expert, but I’m pretty sure the answer is no? Aren’t a lot of these NFTs some simple fixed-size collection of random vectors that when run through a generative art algorithm generates a unique variation of an avatar image?
The correct answer is yes. You're still paying to host the content even if you add new ways to pay to update a shortlink. ENS has to point somewhere and that someone will want to be paid for their time and resources.
No. ENS records are on the blockchain. Once you executed the contract that gives you ownership to a name, it will be yours for the time you paid it for. The ENS developers can not revoke it and they can not change the underlying records or subdomains.
Still yes: ENS records are a pointer, not the data itself. You will need to pay to host that data and you will need to pay every time you change the ENS pointer.
Depending on the amount of data (and your willingness to pay to have it on the blockchain) you can put it on the blockchain directly just fine. Some of these "art" NFTs can perfectly be simple base64 encoded PNGs or SVGs and wouldn't cost too much to have them stored directly.
But forget about this case... even if "you are not storing the data directly with ENS". So what?! Do I get to host my website with my DNS server? Do I get free email service with my MX records?
The whole thing I was talking about with ENS is that it is a decentralized way to get an identity online, not to have a free website. I am failing to see your point.
> So what? Do I get to host my website with my DNS server? I am failing to see your point.
You responded to someone who was talking about “certified original one of a kind URL pointing to the image they host”. In that case, you are dependent on them continuing to exist or exiting gracefully (i.e. do their contracts allow you to change the target?).
If you mirror it in time, you can of course pay to update it to point somewhere else but it again highlights that all of this infrastructure is very expensively duplicating an existing decentralized system but worse performance and reliability than the web.
No. I responded that NFTs are not just about "digital art in specific URLs". DId you read the comment I linked to before or did you just want to "well, actually" me and argue a strawman?
There was no "described scenario". OP was asking whether "the NFT market rely on trusting that the company doesn't cease to exist" and my response is that an ENS domain or a unlock-protocol lock are NFTs with utility on their own and that you never get to lose because of something that happens off-chain.
It doesn't matter whether the data is stored on a blockchain or elsewhere. Storing data is costly and storing it on a blockchain is even more costly. Someone has to pay for the cost or it won't be stored.
Yes, and again... so what? My argument from the beginning (and from the comment I linked) is that NFTs are not about storing data. The NFT "market" is not just about storing JPEGs at specific urls.
Using Bored Apes (or any "digital art" project) as an argument against the "whole" of NFT is just a strawman. That is my point.
NFTs are simply single issue tokens that can optionally be part of a collection. While most NFTs today take the form of a link to decentralized storage on solutions such as IPFS or Arweave, it is completely possible for an NFT to provide value as a token. For example you can have a project where NFTs provide access to services, as well as optionally have links to art. But you really don't need to have the art aspect at all, you can use them as access tokens or whatever you want really.
So it’s either an expensive way to claim ownership of a resource provided other people are trusted to do the actual work of hosting that resource, or it’s an expensive way to replace JWT’s. Exciting. Truly.
Expensive on Ethereum's base layer. Don't forget the many layer-2 solutions. Loopring is about to launch its marketplace, ImmutableX is already live as well.
Real estate title is a good example of something that could be handled this way more cheaply than it is now. Title to any physical asset could be handled this way, too.
> could be handled this way more cheaply than it is now
I don't see how that's possible. Right now, at its core a real-estate title is a row in a database managed by the local government (whether a row in sql, a row in excel, or a row in a physical document).
That system, with a centralized way to ensure it is unique etc, is strictly cheaper than any blockchain / NFT can be for storing that same row of data.
The reason real estate titles are expensive now is that there are significant legal burdens and human overhead on top of this database row.
NFTs can't be used like a real estate title unless we also add the same legal frameworks and human processes on top of them. The only bit the NFT actually replaces is that database row, not the expensive other stuff.
Now, you might claim "ah, but with NFTs you may be able to cut out some middle-men. If the token is legally binding, then you can transact directly and skip a lot of mess". But, of course, we could build that _already_ with the existing system by letting the owner of a row in the existing sql/excel/paper database digitally sign a statement saying "I transfer this ownership to X, this is legally binding". If we can get the law to recognize NFTs, then getting them to recognize this cheaper, far simpler, cryptographic operation would be both cheaper and easier.
... Or that's my take I guess. I'm curious to hear yours though!
Do you think an NFT-based real estate ownership system will be cheaper because we'll rebuild the system from scratch, and rebuilding the existing system without NFTs would be similarly cheap?
Or is there a fundamental reason NFTs are cheaper here than building the same thing on top of a centrally managed government-owned database?
Your cheap jab says more about your lack of imagination about potential use-cases than about whatever shortcomings the technology has at the moment.
Okta is a multi-billion business and could also be characterized as "an expensive way to replace JWTs". Authz/authn is one of the most common use cases that every application developer needs to implement. How much would you like to bet that in 5 years time NFT-based authn/authz will be bigger than Okta's market?
The value of Okta is in its centralization - the reputability of the brand and the existence of a conscious entity equipped with the power of reason that can use their centralized superpowers to resolve unexpected issues as they come up. And if there’s anything I know about software, it’s that unexpected issues always come up.
Remove that and you have all the existing scams of crypto, except now your personal information and account access is at stake in addition to your money.
As for bets, I’ll happily wager my expected future net worth against these projects by simply not investing in them. If you feel differently, do differently. I don’t care.
Clearly you have a strong dislike for the tech, and that's fine I don't care of course, but do keep in mind that there are ways to isolate risk pretty easily. Even if the technology doesn't result in a huge change in how auth is done to scale in the way that Okta does, there is value in simplifying authentication / authorization workflows for users that decide they want to participate in the web3 ecosystem.
As a solo developer making applications in the ecosystem, it's a breath of fresh air to not deal with Oauth+OIDC workflows and utilize wallet connectivity + token authorization to very elegantly handle these scenarios on smaller projects. End user experiences are pretty great too, I quite enjoy being able to authenticate into a website without needing to associate everything with my email address and/or rely on 3rd parties to provide trust solutions such as SSO via Google/FB/Okta/whatever.
And yes, the risk is higher in a decentralized model because if my private keys are compromised on most wallet types, then I can lose my funds / identity. There are solutions to help lower this risk however.
The best examples right now are honestly NFT marketplaces or DeFi, however you can authenticate with these services without needing to have any funds available on your wallet.
If you're curious and want to try out the flow, you can download a web3 wallet like MetaMask - https://metamask.io/ - this is a popular web wallet extension for Ethereum and EVM platforms. If you want to try out Solana, I recommend https://phantom.app/
I personally like Solana more than EVM chains at the moment but it doesn't cost anything for you to try either.
Once you have the extension and create your wallet, you can navigate to an NFT marketplace, and connect your wallet.
You can then click on the connect / select wallet button, and it will allow for you to connect your wallet to the website. This will authenticate you into their website, there's some additional steps on Opensea IIRC if you want to construct a full profile, but the base authentication only requires this. And like I mentioned, you can authenticate in this manner without owning a single dollar worth of crypto.
For the projects that allow for you to interface with chains / wallets, I've used these:
Essentially what it comes down to is a user has a wallet, that is typically a web wallet via extension, but you can of course use hardware wallets if you'd like, however those do require you to own one, so if you just want to play around with the ecosystem, these extensions are the easiest to use. These above projects are javascript APIs that allow for interacting with wallets and onchain programs.
Note that both of these are frontend solutions. There are backend solutions for both chains.
> Remove that and you have all the existing scams of crypto, except now your personal information and account access is at stake in addition to your money.
No, precisely the opposite. It's only with crypto that you can have a system that can authenticate you and authorize you to access resources without caring about any of your "real world" data. And if you are worried that your "wallet" might be hacked, you can simply use different ones for each different purpose. Your "money" crypto wallet does not need to be the same as your "online identity" wallet.
> No they don't, they are trustless. They do exactly the opposite.
They allow anyone to build a trusted application. That is the sense in which they democratize trust. Prior to crypto, anyone building a stateful software application that ran remotely had to be trusted by their users. Their users had to have personal faith in the credibility and trustworthiness of the organization. Even if the organization was ostensibly open source, there was no way to validate what the code on their servers was doing, or where the data was going. Crypto changes that.
It enables anyone to write an application, deploy it, and guarantee to its users that it does what the code says it does. That is a new thing in the history of software. Whether or not you think that thing is valuable is up to you. That it is new, and that crypto does it, is not.
I see no reason to believe trust comes from scale. Trust comes from the rule of law. And rule of law requires institutions, and ultimately a central authority, that must be able to use coercive force to maintain law and order and to enforce private contracts. A decentralised system is incompatible with that.
Yes, and the stability of all those things come from scale. Institutions are strong for several reasons, but one of the most important is size.
You would, or at least, should, trust a small bank less than a large one, all else equal. You should trust a small government less than a large one, all else equal. This is a simple function of incentives. If a bank is large, your size relative to it is small. You can't damage it financially, you can only damage it asymmetrically via its reputation. Since your assets are tiny compared to the value of its reputation, it pays to treat you well enough to avoid reputational damage. A small bank, on the other hand, gains more in relative terms from taking your money.
To address you more specifically:
> And rule of law requires institutions, and ultimately a central authority, that must be able to use coercive force to maintain law and order and to enforce private contracts. A decentralised system is incompatible with that.
Which coercive authority is more powerful, 1 guy with a gun, or 2? How about 100 vs 1000? Trust comes from power and relative size. If you are small relative to a powerful actor, and that actor's power derives from collective trust, screwing people over is bad, unless the person they're screwing is large relative to them.
I don't agree that a large bank is less likely to take my money and therefore more trustworthy. First of all, I don't need to trust that a bank won't take my money, in order to do business with it. I have to trust that if the bank takes my money, authorities will intervene and I'll get my money back. That's how things work in a functioning society. People don't have to trust each and every one of the individual parties that they transact economically with, like they would in a system without a central authority. Instead, they only have to trust that the central authority will assert their power to uphold the rule of law. And the law applies equally to small and large banks, and to everyone else, so there's absolutely nothing that would suggest I should trust more a large bank over a small one.
If you think that JPMorgan is equally likely to steal your money as some small scale local bank, I think we're just going to have to agree to disagree here. I think the historical evidence is super clear on this point, not to mention the incentives.
The probability of any counter-party in any context choosing to screw you over is proportional, all else equal, to the size of the assets of yours they can steal, relative to the size of their stake in continuing to operate in the community. If a bank has $1mm in assets and you have 100k deposited with them, it's much more worth their while to steal from you than if they have $1bn in assets.
Now, those are not the only factors that impact the probability that you get stolen from. The institutions of the society in which they are embedded matter as well. But holding those institutions constant, i'd argue this is the primary factor that matters.
Here in Europe the possibility that a bank could steal money from its clients is not a concern that people have, because it's not something that happens or that people think could happen. There's no way a bank can steal your money and get away with it. Therefore the idea that a bank of this or that size is more or less likely to steal your money is quite strange. Maybe it's different in other parts of the world, although I don't think it is.
I believe what you mean is that it's something that doesn't happen frequently. But do you know why that is?
It's not because banks are unable to steal customer's deposits. It's because of the capital investment these banks have made in their reputations. That capital investment is in the form of fixed infrastructure, real estate, licenses, and reputations. It's that capital investment, and the threat of losing it if they break the law, that keeps your money safe.
That all works pretty well at keeping money safe, as you noted. But it has another effect. It makes it extremely expensive to start a bank, or other financial service. This is what crypto democratizes. It makes it possible to start a financial service without massive capital investment in things like this.
Sorry, that doesn't make any sense. We don't live in a society where crime is prevented by reputation. Laws and law enforcement prevent crime, not reputation. Second, a bank's reputation comes from its past behaviour, not from the amount of capital it has invested. Banks invest in capital because providing financial services requires large amounts of capital. Crypto is not going to magically let you provide financial services without investing similar amounts of capital.
> Laws and law enforcement prevent crime, not reputation
Enforcement, by definition, does not prevent crime. It may deter crime. But a bank cannot be put in prison. The damage to a bank from stealing its clients money is reputational, the loss of their business.
> Second, a bank's reputation comes from its past behaviour, not from the amount of capital it has invested
It comes from both. Past behavior, and the amount of capital invested. If a bank has $1mm in assets, would you deposit $10mm? I wouldn't.
> Crypto is not going to magically let you provide financial services without investing similar amounts of capital.
Yes, it will. In fact, it already has. DeFi provides many of the same services banks do, for a miniscule fraction of the capital investment. You can deploy a contract right now that provides services like margin lending for a few dollars. Building the infrastructure and trust to do that at a bank would take you decades, and tens of millions of dollars in capital expense.
No, a bank can't go to prison, but its executives can. Further, a bank is a registered corporation and a legal holder assets which can be seized by courts. This means it can't escape legal action. The courts would seize the stolen money and return it to the rightful owner, while the bank would be fined and/or stripped of its license. The size of the bank is irrelevant, as far as the rule of law is concerned, because a key principle behind the rule of law is equality before the law. Therefore, no, nobody thinks that because a bank is small it's more likely to steal their money. That's a bizarre idea. The size of banks, and firms in general, is explained entirely by economies of scale. It has nothing to do with reputation, or the fear that they will steal your money. (No offence, but you sound like someone from a communist country who is unfamiliar with how the capitalist system work.) Lastly, deploying a contract is not the same thing as providing financial services. You can deploy a contract in conventional finance too without investing any capital at all. This is not what banks do. The problem with DeFi is that it's crippled because of its intrinsic limitations, namely the fact that smart contracts lack coercive power. As a result, most real-life contracts (such as a simple signature loan agreement) are unenforceable in DeFi, and therefore not possible at all.
> No, a bank can't go to prison, but its executives can. Further, a bank is a registered corporation and a legal holder assets which can be seized by courts. This means it can't escape legal action. The courts would seize the stolen money and return it to the rightful owner, while the bank would be fined and/or stripped of its license. The size of the bank is irrelevant, as far as the rule of law is concerned, because a key principle behind the rule of law is equality before the law.
But the principals of the bank can abscond with the value before the law has a chance to react. The thing that prevents them from doing so is their investment in the bank's reputation. The size of that investment is correlated to the bank's scale.
> Therefore, no, nobody thinks that because a bank is small it's more likely to steal their money. That's a bizarre idea. The size of banks, and firms in general, is explained entirely by economies of scale. It has nothing to do with reputation, or the fear that they will steal your money. (No offence, but you sound like someone from a communist country who is unfamiliar with how the capitalist system work.)
I work in quantitative finance. I think i'm doing capitalism just fine. It's understandable for you not to be aware of the dynamics of these things, because you probably don't deal with large enough amounts of money to think about what percentage of assets you are at a bank or financial institution. However, anyone who has started a hedge fund has confronted this problem: Nobody wants to be more than 10% of your assets under management. If all you have is a million dollars, all anyone wants to invest is 100k. The same is true for banks, or any depository institution.
You wouldn't deposit $10,000 at a bank that only has $1,000 in other deposits. Google isn't going to deposit $10bn at a bank that only has $1bn. You can't trust someone to hold your assets that is small relative to your deposit, for a few reasons, but a big one is that the incentives are all wrong.
> The problem with DeFi is that it's crippled because of its intrinsic limitations, namely the fact that smart contracts lack coercive power. As a result, most real-life contracts (such as a simple signature loan agreement) are unenforceable in DeFi, and therefore not possible at all.
DeFi does not require coercive power to do what it does. DeFi is structurally incapable of violating its own contracts. They do what they say, always. They do not require a legal system to enforce their tenets.
This has advantages, and it has disadvantages. The disadvantage is that it is highly inflexible. The advantage is that it is deterministic and certain. Sometimes you want one, sometimes you want the other. They are both useful in different circumstances.
> But the principals of the bank can abscond with the value before the law has a chance to react. The thing that prevents them from doing so is their investment in the bank's reputation. The size of that investment is correlated to the bank's scale.
Do you seriously not see that this doesn't make any sense? Why would a criminal bank executive who's willing to run away with the bank's money care about the damage being done to the bank's reputation? They don't have any issue with stealing money from the bank but somehow they wouldn't want to damage its reputation?
> I work in quantitative finance.
I very much doubt that. It's clear that you don't understand incentives, and that you're unfamiliar with basic economic concepts such as the minimum efficient scale of a business. The notion that the amount of a bank's capital is the result of the bank wanting to maximise its reputation is not found in the scientific literature, nor it is supported by any economic theory, nor by common sense. Feel free to prove me wrong by providing a reference.
> DeFi does not require coercive power to do what it does.
That's because it doesn't have coercive power and therefore it can only do stuff that doesn't require coercive power, such as over-collateralised loans and voluntary exchanges, but this is just a tiny subset of finance. For example, under-collateralised loans, mortgages, bond indentures, basic enforcement of property rights, all that requires an authority with coercive power.
> Do you seriously not see that this doesn't make any sense? Why would a criminal bank executive who's willing to run away with the bank's money care about the damage being done to the bank's reputation? They don't have any issue with stealing money from the bank but somehow they wouldn't want to damage its reputation?
The executives and shareholders have the incentives. Their incentives cause them to create mechanisms to incentivize and validate the people below them. Simple.
> I very much doubt that. It's clear that you don't understand incentives, and that you're unfamiliar with basic economic concepts such as the minimum efficient scale of a business. The notion that the amount of a bank's capital is the result of the bank wanting to maximise its reputation is not found in the scientific literature, nor it is supported by any economic theory, nor by common sense. Feel free to prove me wrong by providing a reference.
I'm certainly not going to provide you a reference as I value my privacy more than winning this argument. But it's true, whether or not you want to believe it.
Go ask anyone you know working in finance if they'd allocate $10mm to a manager with $1mm in assets. Go ask anyone running a hedge fund if they'd allocate $10bn to a brokerage managing only $1bn. Go ask anyone with a hundred million dollars to deposit if they'd deposit $50mm in a bank that only has $10mm in assets. This is no mystery. It's not some secret knowledge that only I possess. Anyone in a position to do these things has thought about these problems, and can and will tell you the same thing: hell no I wouldn't do that.
We can bring this back to a concrete level you've probably had experience with, if you like. Let's say you have a wealthy friend, worth a few tens of millions. And let's say you have another less well off friend, say someone that makes 20k/year. The three of you are walking around town, but both of your friends forgot their wallets at home. Your rich friend sees something expensive, say, $1000 he wants to buy. He asks you to spot him the money and he'll pay you back later. Your poor friend asks you the same thing. Who do you feel more comfortable lending to?
Deposits at banks are loans to that bank. Every lender on the face of the planet looks at the creditworthiness of their borrower. Creditworthiness comes from assets and income. The legal system matters too, of course. Interest rates will be lower under strong legal systems. The legal system is one of several parameters in the creditworthiness/interest rate function. The other parameters are assets, income, and reputation. If we think a little more abstractly, we can simply file 'reputation' under the 'assets' column.
Again, this is not a mystery. You just aren't used to thinking of your bank deposits as loans, because of the FDIC. But they absolutely are loans. Every time you deposit a paycheck you're lending your bank money. You are acting as a creditor, just not a very smart one. And you don't have to be smart, because the government has de-risked your loans for you, at least, until you hit the FDIC deposit insurance limit.
Read literally any credit valuation model from any finance textbook or Wikipedia. Every single one will ask "How big is your loan relative to the income and assets of your borrower?", without exception.
> That's because it doesn't have coercive power and therefore it can only do stuff that doesn't require coercive power, such as over-collateralised loans and voluntary exchanges, but this is just a tiny subset of finance. For example, under-collateralised loans, mortgages, bond indentures, basic enforcement of property rights, all that requires an authority with coercive power.
Great, we've already made progress then. A tiny subset of finance. That is more than nothing. You're well on your way to getting it.
But I only asked for a reference to a journal article that supports your assertion that the size of banks is the result of banks investing capital in order to build a reputation.
I'm not really interested in hearing more of your crackpot theories.
Yes, I buy many domains and I don't expect them to be taken away from me. But I like the idea of having alternative ENS names (yes, ENS domains are NFTs) as some kind of hedge against the occasional top-level domain crisis, or in the odd chance that my domain registrar fucks up/gets hacked or even as some kind of back-up plan for the case where registrars decide to collude and increase prices.
Same thing for banking/finance. Yes, SEPA works well in Europe and in 99% of the cases I am okay using my credit card. It doesn't negate the case where I'd like to pay someone where the only alternative is Paypal and with it its crazy fees, odd cancellations, poor customer support, etc.
For merchants, the same. Not long ago OnlyFans almost destroyed its own business because it wanted to kill its adult content side. The reason? Mastercard. Should we be telling all the sex workers and adult entertainers that we should be better at "building trust", or should we be able to say "crypto payments can be an alternative and do not depend on the interests of some powerful group with the right connections"?
>Should we be telling all the sex workers and adult entertainers that we should be better at "building trust"
Given that the reason there was controversy around OnlyFans was because of scandals about child sex trafficking, I'd say yes. The rest of society should be able to trust that OnlyFans is not providing a platform for trafficking children; crypto payments do nothing to solve that problem, they may even make it worse. They're really good at increasing fees for middlemen though, and it's very frustrating to hear them pitched as a solution to something when the original problem seems to so often get lost in translation.
I'm not going to argue about the specifics of OnlyFans because I'm honestly not aware of the details. In any case, you are missing the point. I could talk about any "legit" adult site and all the extra fees they have to pay because of the risk and credit card fraud associated with the industry, or I could even just use a more "innocent" example such as Gumroad or Steam, who sell only digital content, and would benefit from crypto-payment systems: no chargebacks, no fees for micropayments, no currency conversion fees, etc.
> they're really good at increasing fees for middlemen though.
I can make transfers now of any amount of ETH/DAI for exactly $0.19. [0] This is already competitive with credit card transfers for less than $5. Raiden [1] released today a new version of their client, so you can have decentralized transfers for virtually free (fractions of a cent if the transfer needs to be mediated by other nodes, but basically free otherwise).
I can't see how that is the point, I honestly don't understand what cryptocurrency provides there at all. I've seen nothing about it that suggests it has some kind of novel solution to fraud prevention; no chargebacks just means the customer now has no recourse from a fraudulent vendor, so you've pushed the cost of fraud all onto them. It's also possible to get no fees for micropayments and no currency conversion fees with a more traditional virtual currency, crypto only adds costs on top of that.
>Raiden released today a new version of their client, so you can have decentralized transfers for virtually free
It seems like an interesting way to do peer-to-peer lending, that is not specific to cryptocurrency. I would be interested to see the same algorithm deployed on a credit card network to see if the fees can be reduced even farther.
> no chargebacks just means the customer now has no recourse from a fraudulent vendor.
This is the realm of the social layer, not the technology. You can add an escrow system or even use a reputation-based approach as a way to manage fraud, but the idea is that it is optional. If all you want is to buy some cheap and fast content online, you can't do that with credit card but you can with crypto.
> It's also possible to get no fees for micropayments
Please point me to one micropayment solution that does not involve middlemen and/or extraordinarily high fees (in proportion to the value of the transaction).
> and no currency conversion fees with a more traditional virtual currency, crypto only adds costs on top of that.
Problem statement: you are a software company in the UK and you want to contract a developer based in Argentina. She wants to receive (in Pesos) the equivalent to 500GBP.
Find me some non-crypto alternative where she can get that amount with minimal loss. We can compare notes later if you want, but I can tell you a crypto alternative where the cost is less than 0.3%.
>You can add an escrow system or even use a reputation-based approach as a way to manage fraud, but the idea is that it is optional. If all you want is to buy some cheap and fast content online, you can't do that with credit card but you can with crypto.
I don't understand how this follows at all, the only thing you've added here is that you can't get your money back if the "cheap and fast content" turns out to be a scam. I can't understand why anyone would want this to be optional.
>Please point me to one micropayment solution that does not involve middlemen and/or extraordinarily high fees (in proportion to the value of the transaction).
This would be any virtual currency where you buy it to spend directly with the market operator, the kind you see on prepaid cards in retail stores. That's in the context of a vendor like OnlyFans that runs a marketplace of sorts; if you consider that to be a middleman and you only want some completely peer-to-peer solution then that's a different question with different risks from what we were originally discussing, and most cryptocurrency doesn't fit that definition anyway.
>Find me some non-crypto alternative where she can get that amount with minimal loss. We can compare notes later if you want, but I can tell you a crypto alternative where the cost is less than 0.3%.
I'm not really interested to search around for every exchange I can find and make a comparison, but I would be very skeptical of any crypto-based solution claiming they can lower fees here. The costs of doing bank transfers are the same regardless of whether you use crypto as the medium to move the money. There's probably something else they're doing.
This is getting towards my main problem with these crypto conversations, we're moving away from what the technology actually brings and instead we're getting into only comparing fees without considering any of the other details of what we're actually doing. I find this to be a pointless angle to take; there isn't going to be a period where we use cryptocurrency and we can totally avoid fees, because an explicit goal of every cryptocurrency I've seen is actually to make it so participants can't avoid paying fees. And when you get into smart contracts, every participant can now start acting as a middleman and charging more of their own fees in addition to the transaction and gas costs you pay to the network.
> I can't understand why anyone would want this to be optional.
If someone can make a living by selling e-books/blog posts/Photoshop paint brushes for cents on a dollar to hundreds or thousands of different people - all this person needs is to have people who are willing to take the risk of losing cents of a dollar. When these people pay for the person and actually get what they were expecting, the producer gets the money and the consumers got what they wanted and will then vouch for the producer's honesty.
And if the person is not honest, all it will take is for a few people to lose a small amount of money which is simply not worth fighting for, but it is enough to get those victims to warn others about the scam.
> the kind you see on prepaid cards in retail stores.
This includes middlemen and friction. It's a non-starter as a real alternative to simple payments via crypto.
> I'm not really interested to search around for every exchange I can find and make a comparison.
You really should, because that would be a huge lesson for you and everyone else that criticizes crypto without taking a look at the actual reality of a lot of people.
I specifically used Argentina for a reason: Argentina has strict capital controls and a handful of different exchange rates. If you are an exporter, the central bank converts USD/ARS at one rate. If you are importing, at another. If you are an investment bank at another. "Retail" does not even get to be able to convert money, so they all need to resort to the black market. The difference between the "official" rate and the black market is ~15%. So, someone that wants to receive ARS from someone sending USD (or GBP/EUR...) they will be facing a 15% cut just to be able to cash out.
>And if the person is not honest, all it will take is for a few people to lose a small amount of money which is simply not worth fighting for, but it is enough to get those victims to warn others about the scam.
I am sorry but I don't consider it a positive that someone can clandestinely scam people out of lots of small amounts of money and the only thing an ordinary customer can do is wait until someone else more knowledgeable notices it and then hope they warn everyone and have enough resources to put together a class action suit or just accept that their money is lost because maybe it was too little to care about. At best, this is no better than the current system when using sketchy non-crypto payment systems; at worst, it's asking customers to shelter all of the risk of the product being a scam.
>This includes middlemen and friction.
The point here is that to the market operator, it's actually less middlemen and friction than crypto, they operate the currency directly and so there is no fees for them. It seems like you're shifting from the perspective of the market operator to the customer, but that's not what I was discussing, and it's also not true of most cryptocurrency anyway.
>You really should, because that would be a huge lesson for you and everyone else that criticizes crypto without taking a look at the actual reality of a lot of people.
I don't think it would help because it doesn't explain why the fees would be lower. That's the only question I'm interested in, as far is this hypothetical conversation is concerned. I can pull up a lot of numbers but that's not really giving a full picture. Your description seems to suggest this is illegal in Argentina and you'd be asking your employee to commit a crime, so I suppose that answers my question.
> clandestinely scam people (...) and then hope they warn everyone and have enough resources to put together a class action suit
Do you have any idea of how much money is lost on scams via Western Union? Or how much money companies spend on fraudulent ad views? Insurance fraud?
Before you cry "this is whataboutism", the point I am trying to make is that every security/insurance system is designed around a risk/benefit analysis. There are some situations where the cost of having these systems is simply not worth the value of the transaction, so why should we use it?
Conversely, should we kill every business opportunity just because the cost of avoiding scammers and ill actors is too high? Do you think that Craigslist should be drowned into a see of ineffective regulations because of all the scammers that are there, or should we try to educate people around the potential pitfalls and let it operate in a more organic form?
> The point here is that to the market operator, it's actually less middlemen and friction than crypto
Absolutely not. If I want to sell something online and I accept crypto as payment, I can do it without any middlemen. The only "friction" the user faces is to open the wallet (or scanning a qr code) and pressing "send".
Gift cards force the user to commit to an initial higher amount and to a specific vendor. It's a whole different league.
> I don't think it would help because it doesn't explain why the fees would be lower.
Because you'd be bypassing the central bank, and you would be negotiating with other people who are also trading with the rates from the "blue" dollar (the non-official market). Nothing illegal. Kraken (a crypto exchange) operates on Argentina for years already and any "retail" account can trade there. It's just that the volume there is not big enough yet to make the government greedy about it.
> Do you have any idea of how much money is lost on scams via Western Union?
Which is why we try to move away from that kind of thing, and part of why we're seeing stricter KYC, 2FA requirements and so on. Consumer protection is a hugely valuable part of civilised society, but funding it is a prisoner's dilemma - if you make it optional then people make the individually rational choice to skip it, which is fine until you reach a tipping point where so few people are opting in that the market allows scammers to thrive.
> Do you think that Craigslist should be drowned into a see of ineffective regulations because of all the scammers that are there
Really objective phrasing there lol. No, I think Craigslist and the like should be subject to effective, proportionate regulation (and, sure, in some cases that might mean shutting down a marketplace where there's simply no way to run it and have it not be full of scammers, and I'll defend that as the right decision for the overall public interest), and I believe government for all its faults is better at doing that than blockchain operators.
> I think Craigslist and the like should be subject to effective, proportionate regulation.
In theory, "effective, proportionate regulation" would be great. In practice, we get systems that promote the Surveillance State, regulatory capture and Crony Capitalism, and the implementation of "one-size-fits-all" solutions that eliminate all options to have local autonomous communities.
> Consumer protection is a hugely valuable part of civilised society.
Like I said in the top comment: it's not an either/or proposition. I don't think that blockchain/crypto/decentralized solutions need to replace the existing solutions to be worthwhile. They are worthwhile because they increase our optionality and work as an hedge.
A "civilized society" that requires all people to be subject to the same rules all the time and can not withstand ambiguity and context analysis is a fascist one. The more you see people pushing for this idea that blockchain should be eliminated, the more you will see other people realizing how much it is needed.
The idea that capital should be allowed to act without any oversight or accountability is fundamentally fascist. Wealth distribution follows a power law at the top, so the majority of wealth ends up in the hands of a few or even a single individual - if you say that wealth must be able to be used anonymously and society must not be allowed to stop any mutually beneficial trade between two individuals, then you give those few essentially unlimited power, because there will always be someone desperate enough to do whatever it is they want.
I agree with the need for some flexibility and grey areas. But unrestricted capital is far too dangerous, like private nuclear weapons.
>Do you have any idea of how much money is lost on scams via Western Union? Or how much money companies spend on fraudulent ad views? Insurance fraud?
I'm fully aware, that's why I'm upset that the entire design of crypto seems to be either punting on this problem (to the "social layer" as you said) or is just intentionally making it worse (ransomware). This is not a revolution I can get behind.
>There are some situations where the cost of having these systems is simply not worth the value of the transaction, so why should we use it?
I mean, this doesn't really give any confidence in the value of your transaction if it's so worthless to even matter. Doesn't this just seem a bit fishy to you? After talking to a lot people, I don't think any self-respecting creator online wants to exist in that space for any longer than they have to because it's rife with scams. It's certainly not making me want to drop any money on micropayments any time soon.
>If I want to sell something online and I accept crypto as payment, I can do it without any middlemen.
Well this isn't true, the network itself and the miners (or whatever) is still the middleman. With a currency the vendor operates, there is no middleman at all, you control the whole money supply. Yes the customer still has to pay a form of "exchange rates" when taking cash in and out but that's the same thing as crypto.
>Gift cards force the user to commit to an initial higher amount and to a specific vendor. It's a whole different league.
Again you're changing the discussion to the customer, not the market operator. I don't think this is a reasonable comparison to make because now you're not talking about having a service like Onlyfans any more, you're talking about having entertainers sell directly to customers, which is also a whole different league, probably one that has higher fees because now the creator will likely want to charge more as they now have to offset many other extra costs.
>Because you'd be bypassing the central bank, and you would be negotiating with other people who are also trading with the rates from the "blue" dollar (the non-official market). Nothing illegal. Kraken (a crypto exchange) operates on Argentina for years already and any "retail" account can trade there. It's just that the volume there is not big enough yet to make the government greedy about it.
I still fail to see what the actual practical benefit of crypto here is if the only situations it's really useful is a place where the government has made low cost international bank transfers illegal and you just have to hope they don't come after crypto even though you know they will eventually. It's essentially being propped up by a central financial authority; isn't that the opposite of what crypto is supposed to be?
Read again my very first comment. It does not need to be a "revolution" to be useful. As long as it is can be really useful to some people some of the time, it is already valuable.
> After talking to a lot people, I don't think any self-respecting creator online wants to exist in that space for any longer than they have to because it's rife with scams.
Sorry, that is BS. Plenty of "self-respecting" businesses and people are willing to work just for the expectation of money through advertisements, why wouldn't they work for micropayments?
And again, the idea is to have another option, not to have an all-encompassing solution. It does not have to be a binary choice.
> Again you're changing the discussion to the customer, not the market operator.
Markets do not exist in a vaccum. The whole point of credit cards is that it makes the transaction easier/faster/cheaper for the consumer, so of course you need to look at the solution as a whole.
> the network itself and the miners (or whatever) is still the middleman
No, the network does not charge a proportion of the transaction costs. They provide a service. Do you count your electric company and your ISP as "middlemen" between you and your Amazon purchases?
> I still fail to see what the actual practical benefit of crypto...
OpsSec is and should always be part of the vocabulary for anyone dealing with crypto seriously and they should know that they need to have a plan for the inevitable. Also, more and more smart wallets are implementing solutions that allow for social recovery of keys.
> Compare the reprocussions of that with the traditional system.
> OpsSec is and should always be part of the vocabulary for anyone dealing with crypto seriously and they should know that they need to have a plan for the inevitable.
So, this is just for someone who is already part of the technological and economic elite? Things like "how do your heirs recover the appropriate access to your wallet upon your death" is something that someone should think about before they buy their first bitcoin?
The thing that keeps turning me off of cryptocurrency is the appearance that a small and vocal group of people are trying to set up an alternate libertarian fantasy economy that only benefits the upper echelon of society that are educated enough in the nuances of the technology so that they don't encounter any number of foot guns and irrevocable and anonymous scams that is founded the fancy technology equivalent of a "name that star" catalog (with all of the associated competing ones that can name the same star too).
So, how is the average person supposed to take advantage of the cryptocurrency economy if they're the type that forgets their passcode on their phone where their wallet is stored and have found it easier to buy a new one? Or for the grandmother who kindly helps out the county password verification agency who calls up to check on if her bank account is secure enough?
How is cryptocurrency better for these people than the already existing banking systems and title transfer system where the system itself has human checks in it and can reverse things when a scam or fraud is discovered?
Again, what is with this mentality that can only think in extremes? No, someone who is just starting with crypto should not be thinking about estate management. But someone just starting with crypto should not be putting so much money into it to even worry about that. They are - by definition - just starting.
So how does the average person buy a house where the title is managed on the blockchain with a significant portion of their life's savings and a mortgage from a bank?
... Or is this something that is not possible?
If this is not possible, is this economy inherently excluding the average person?
No, it's not possible (yet?) to have a financial system on the blockchain that maps 1:1 to the existing financial system.
> So how does the average person buy a house where the title is managed on the blockchain with a significant portion of their life's savings and a mortgage from a bank?
The average person won't buy a house and will not have a mortgage, unless your idea of average person is of the average American.
But you know what any average person can do? They can put their capital (no matter how little) in a money market [0] where the lending rates are higher than what any other bank will offer them. They can stick only with stablecurrencies to avoid price volatility. If they do want to take on risk, they can speculate in the derivatives market [1]. They can get together with other "average people" in participate in a distributed capitalization lottery [2] and participate in a no-lose game.
With DAOs, they can profit even from being "share holders" in a system. Again, let me use ENS [3] as an example which is a good example of a project that has a "real business" with a clear business model. They just released their governance token, and it is quite possible that in the future this will become a vehicle to have a revenue share where token holders get to receive a dividend.
Right now, anyone can go an build a new notary or governance protocol on blockchain, for their own purposes, without asking for anyone's permission.
Government trust is great, and bank anchored trust is great, but neither of those parties has as yet volunteered to run the kind of digital infrastructure required to run your own stuff on top of, and can you imagine the paperwork? (I bet there are some bank efforts but good luck getting on their platform).
>Trustless solutions have no place in a world with robust trust, which is most of the developed world and parts of the developing world.
Unless you use a silly spherical cow model of history and risk, the robust trust you are referring to is not rational. Catastrophic breakdowns of society happen far more frequently than people like you assume. Please consider the case made by this essay: https://medium.com/s/story/the-surprisingly-solid-mathematic...
- napkin math indicates that a person living in america at some uniformly random date post colonization would have a little over 1/3 chance of experiencing a revolution or civil war
- Since the fall of Constantinople in 1453, there have been 465 sovereign nations which no longer exist, and that doesn’t even count colonies, secessionist states, or annexed countries. Even if we presume that half of these nation-state transitions were peaceful, which is probably a vast over-estimation, that’s still an average of one violent state transition every 2.43 years.
- In 2010, 8.5 million tourists visited Syria, accounting for 14% of their entire GDP. Eight years later, they have almost half a million dead citizens, and ten million more displaced into Europe. They didn’t see this coming, because if they did, they would have fled sooner.
"Okay, we trust 90%+ of all transactions. Is there a way we can allocate $1T dollars to get that up to 99% without consuming more electricity than many countries?"
It costs civilization 1/3 (current crypto marketcap ~$3T) and delays an environmental apocalypse
This belief is fundamentally incompatible with the rule of law and human institutions being the final arbiter. Unless those who make and enforce the laws cede authority to the blockchain, the blockchain (and the mathematics that runs on top of it) won’t be the authority.
Agree. The difference in my belief structure is that those that make the laws cannot cede authority to math. The mathematics already overrides their authority. They are beholden to the laws of physics and mathematics, we all are. They cannot be overridden.
Who is the "we" that is actually implementing things and putting their skin in the game, if not this "vocal minority" that wants to build an alternative? I don't know of any developer in crypto being forced to work on things against their will.
The thing I don’t get about NFTs in general is that they don’t actually seem trustless to me. You need some sort of trusted source that says “this NFT is genuine and not just a bootleg”… and at that point you might as well just have that trusted source track ownership.
NFTs are trusting a single authority, which is the consensus of all of the nodes/miners of the blockchain. Sure, if you go to opensea and try to find the owner of a NFT, they could lie and become an accomplice in a double-spend scheme; but in general you could also download and watch the entire transaction chain and search through it locally (with trusted and auditable OSS) to verify ownership and transfers.
> NFTs are trusting a single authority, which is the consensus of all of the nodes/miners of the blockchain.
That's only for the in-chain history. To actually be able to trust that the NFT is what it's represented as, you also need outside third-parties. For example, many artists are having to deal with NFTs fraudulently claiming to represent their work or benefit the artist, which is not something you can validate using only information on the blockchain.
Once you have a way to confirm the authenticity of the NFT, you also don't need the blockchain because the actual trust is coming from the artist's own statement.
Well yes, but the technology behind NFTs is explicitly just for solving the problem of double-spend/duplication. The authenticity is always provided off-chain since identity and reputation is still managed off-chain, so while "is this NFT real or impersonating an existing contract" is off-chain, the "who is currently owner" question is answered on-chain and requires no further trust or approval of the original artist.
Assuming the artist only makes one copy, then it does constitute ownership of the work of art. You might not have copyright over it - an artists selling a painting today doesn't give up copyright (unless they sign it away at sale) - but you effectively own the work of art as if it were a painting. In either situation, you're hoping the original artist doesn't go and recreate it to sell it again.
Not without a legal contract. If you don’t have an explicit assignment of ownership, an NFT won’t give it to you. If you do, the NFT isn’t adding anything.
You don't need an explicit contract, you can purchase something from someone locally with cash and own the item you purchased - it's a legal assignment of ownership in that there was a verbal agreement to purchase something at a specified price.
With NFTs, the purchase is even stronger than a verbal agreement since the 'legal contract' is the agreement to sell the NFT as a specified price in digital currency. Once again, ownership doesn't have to mean owning the intellectual property, with an NFT you 'own' the combination of bytes that you purchased, even if you don't have exclusive rights to those bytes and even if the original seller can keep making more of the exact same thing you purchased. It's like how you might 'own' a pair of sneakers - chances are those sneakers weren't produced for your exclusive use and tens of thousands of people also own a pair that looks just like yours, but you have every right to sell your pair and transfer ownership to someone else.
Again, the NFT itself is not adding anything. If you have possession of a physical object or an agreement from someone else transferring rights to you, you don't need an NFT. If you have an NFT, you still need the documentation showing that the person who sold you the NFT had the legal rights to transfer the referenced object as well as the NFT — otherwise you've paid for a receipt for “Bridge, Brooklyn x1”.
That seems like a totally different sense of “trust” though, and not one that you could reasonably expect any blockchain or traditional market to solve. Like, yes, you do need to make some small effort to make sure that you’re buying what you are intending to buy, but I can’t imagine that being difficult to do, especially if you’re buying a piece of art from an artist you follow closely.
They’re collectibles, so…you would pay a ton of money for them if you really like collecting those things, or if you want to speculate that the value will increase.
They're only collectibles when they convey legal rights — otherwise you're bidding up a receipt, possibly one of many. Speculation has generated some activity but it's not enough to sustain the market without some kind of value.
But you can determine NFT authenticity by only examining onchain data. You can for instance check the program ID that executed the mint and that it is verified (in the case of Solana, at least), it's a pretty simple verification system that is using entirely onchain data for validation.
It’s a problem, I agree, but because the “authenticity information” can be expressed somewhat succinctly (it’s just a smart contract address), the trust element can be decentralized. Artist might post it on their Twitter, Instagram and website — if they all agree, and you as a buyer trust that the author is actually managing their Instagram, Twitter and website — then there might be enough to create real world - digital world trust bridge. This is particularly easy if an artist is working primarily online and their digital identity already is the main contributor to their fame.
The kicker that amazes me is that when artists register their incredulity and their offense about this (and OpenSea seems to tacitly be A-OK with the whole practice), the randos pile into their mentions asking why they won't work with the people misappropriating their work in this way.
Ah yes, they're not scammers masquerading as the artist, they're authors of genuine artisanal hyperlinks, flawlessly typed with the same hands they lovingly Ctrl/C Ctrl/Vd the image to the handcrafted hyperlink endpoint.
The point of the NFT technology is to keep record of who a notary was. "So and so said this link is authentic, per their own definition of authentic." Whether that notary is important is for humans to decide. A counterfeiter can be the notary, and if people believe in them, then they create some value. Just as some art counterfeits have their own intrinsic value for whatever reason.
e.g. that's why famous nft artists either have their ENS name in their Twitter bio or as their name. With that, you know that e.g. if shaq.eth minted an NFT, it's indeed the real shaq o'neal as otherwise the imposter shaq.eth registrar would have had to have the access to the real shaq o'neal's Twitter account.
no because similar to PGP keys it really doesn't matter where you publish your fingerprint or how you connect your identities. If shaq had a popular website, he could do it there too. E.g. I have my PGP fingerprint on my website: https://timdaub.github.io
In other words, your trust is anchored by Twitter or GitHub. I have to gauge that the key I got was uploaded by you rather than someone else and the thing building that trust is by linking it to an identity established on those services.
PGP had the same problem: the web of trust didn’t scale well outside of existing communities – and where people signed keys for strangers, they also relied on trusted third parties (driver’s license, student ID, etc.) to establish that.
> And then after signing the deed you have to send the paperwork to the county registrar because if they don't write it in their books then the land hasn't actually changed hands?
This is actually not true. A proper deed, signed by the seller and presented to the buyer, is enough to transfer ownership of land. The reason it gets recorded is so that it's easier for you to prove, and it's possible to get title insurance. However, it is entirely legal, and binding, to transfer property without recording the deed.
Nominally, but in my hometown, I've actually seen a shithead landlord pull fraud on exactly those terms on some pliable marks — some immigrants who didn't feel secure in either understanding the law nor in seeking legal remedy. Basically the guy sold a house to someone on contract-for-deed, and just quietly took all of the recurring payments that were supposed to pay off the contract and ... pocketed them instead of recording them as paid. Essentially he asserted that they were years behind on paying off the loan, when in fact they had paid it in full. Almost classic "indentured servitude".
It's a gamble, plain and simple — the landlord was hustling, and gambling that the tenants would both be too poor (lawyers cost money or at the very least cost time away from work), and simply too afraid to file suit (because a lot of people come from places where if you do try to sue, gangsters come to your house and loosen your teeth a bit).
Don't get me wrong - you are technically correct in what you say. But all theft is inherently cheating against the grain of what's technically legal/illegal. Having something on public record makes con jobs like the aforementioned vastly harder to pull off.
In theory the state could be a trusted authority on land ownership, but in practice they don’t have their act together. It’s such a mess that you have to pay for third-party “title search” and “title insurance” to protect the lender from the risk that a sale might not be honored because of a dispute about the property line a century ago. I once had an entry-level temp job verifying old claims on microfiche; I could easily believe they still have to do that today.
are you proposing that there is a technological solution to this? ultimately governments enforce land ownership and whoever they decide is the owner is the owner, no matter what is recorded in a blockchain.
Bootstrapping a legible system that fully agrees with the current system will be a nightmare. I just didn’t want anyone to come away thinking the current system works well, because it really, really doesn’t.
Fully working? Except for having to go through lawyers, realtors, shitty archaic databases (for 'conveyancing' if such records even exist), and proprietary opaque real estate systems (that often don't even show if a house can be lived in because a tenant is already living there. Have fun having the agent leave that out every time you go to buy a house. Protip: most houses are already being rented.)
Even a centralized system with fully digital inspections, contracts, and good indexing would be better than this. But there's too many pieces that are legacy you would need to replace and currently they work very poorly. Buying property is a nightmare of things that can go wrong.
> That was NFTs working fairly well long before the invention of blockchain or computers or cryptography.
Define fairly well. Title/deed recording is a very fractured system, with almost nearly every county maintaining its own recording system. The cost is astronomical to maintain from the recording offices, employees, to attorneys that complete a majority of the recorded documentation. Finally the “double spend” is in no way solved, title fraud and/or fraudulent deeds are a very real problem, that is rising as much as 30% year over year.
What exactly is an acceptable level of fraud to still constitute having solved the double spend problem in your mind?
Land can and does move without registering the deed (in most US states). There are dangers in failing to register, but it isn't manditory. Doing so will certainly reduce the legal headaches, but the fact that a land right is not registered does not make that right unenforceable.
My very-similar-idea of signing PDFs for chain-of-custody (also as a NFT satire) included a "use the cert-transparency chain as a side-chain to solve double-spending" bullet point. It doesn't prevent double-spending (selling the same thing twice), but it can ensure that it can be audited.
I think this is actually a satire of NFT satire. It doesn't actually solve the problem of double spends, and alludes to that fact. It also draws a lot of attention to how complicated the "simpler" system it proposes is.
Unfortunately, HN is fully living out Poe's law on this one.
I suggest that to fix the problem of a single owner being able to sign away the ape to more than one person, the app could be extended as such:
- For every new custody signature, the signer publishes the transfer online to a collectively-maintained database
- We chose the database software such that is publicly accessible to anyone that wants to participate in ape collecting and checking custody signatures
- In case some people start to get annoying and illegitimately edit the custody database, we somehow try to lock the databases edit function making it append-only
Theoretically, "anyone" can run thatsmyape locally, and assuming they've ran `npm install`, they don't even need internet access to do so. Not sure how realistic this is in reality - there aren't even any instructions to get set up, but if there were, then an even larger set of "anyone" could run it.
That said, this is of course a joke. Also from their FAQ:
> Q. Is any of this for real?
> No. Good lord. If you want to protect your digital rights, hire a lawyer. If it wasn't immediately clear that this is a work of satire, we've got some NFTs to sell you.
Isn't that the whole point of the satire? Anyone can make duplicates of any NFT on the blockchain so you still need a central authority to say which is the real million dollar jpg and which is a copy, even though it's on a blockchain.
> You'll also need to register the work you want to protect with a copyright office, and, if you're not the author of the work, you'll need documentation showing that you purchased the work or specific rights to it. Don't skip this step - you'll be digitally signing a declaration of ownership under penalty of perjury, so if you don't actually own the work in question, that could be embarrassing for you.
Antiquated institutions ruled by written laws that require other certified humans to interpret? In my blockchain?! Can you really say that NFTs are open to all/private/democratic unless the laws are all written in conjunctive normal form via Solidity?
(the above is mostly satire. But this project is an amusing take on avoiding double-spending)
Basically, the crypto industry painted itself into a corner due to greed:
1) Bitcoin adopted Blockchain to solve the double-spend problem, the most brute-force approach to solve it, which doesn’t scale to make a “peer to peer cash system”
2) Around 2013 the narrative changed to a “store of value” and some drunk guy’s misspelling of HOLD became a rallying cry
4) And now the technology is entirely unnecessary for NFTs, the industry should have started with NFTs and worked backwards to implement currency
Ok this is getting long… see https://intercoin.org/presentation.pdf for what needs to happen for crypto to get past “number go up” speculation and power real adoption. Counterpoints welcome.
I'm not convinced crypto has failed to be a value store or an effective means of currency and these "arguments" don't really talk about the meat of the problems crypto faces.
1. Regulation is pretty much the defining factor in cryptos status as a "real" currency. It's never going to be legal tender without legislation.
2. The idea that the value of a dollar is intrinsic or demonstrable is hilarious. The gold standard is long gone and the petrodollar is a doomed idea that fluctuates wildly. Economics is neither predictable nor rationale, because humans are not. See: gamestop.
3. The amazing derison on the subject. Only America could develop such a polarizing narrative about something fairly mundane.
4. I work in fintech in a part of the world that's still developing. The banks should be scared of crypto and banks such as Monzo. The key quality here is ability to react to a market. Crypto is not as quick as cash but it's MUCH faster than inter-bank transfers (st least this side of the world).
Use some mechanism (?) to affirm that your legal identity is tied to that pair.
Affirm ownership of some work with a IRL legal statement (plaintext)
Hash the statement with the pair.
Publish.
In order to "sell" just affirm transfer of ownership to another key, hash your statement (let's call it SYN) then they do same for a similar accepting statement (ACK) and you then SYN ACK)
You are missing the critical component, the double spend protection. Which is exactly the world we had <2008. It is powerful and we used it in finance for decades. However trustless systems that prevent double spends are more powerful, and that is why people are excited.
Legal statements are just strings. They mean nothing outside their jurisdiction and only enforceable by violence in them.
ECDSA signatures and PoW blocks can be validated anywhere in the universe.
Nit, probably, but perjury is lying to a court: while testifying, say, or in a deposition. You can't promise that something is true "under penalty of perjury" in a private contract.
DMCA takedowns are 'under penalty of perjury' when filed even though they're not submitted directly to a court, so I assume they're modeling their contract on that. Kinda silly.
I suppose the point here is that those critics have all been "proven wrong."
Bitcoin has proven a great vehicle for speculation but the other promises seem unfulfilled.
Thankfully, NFTs aren’t just a way for executives to hype up an underlying cryptocurrency they’re invested in. I’m confident the social media companies claiming NFTs are a pure hearted way to aid struggling artists will rush to integrate Cryptogogue’s legally sound toolkit for verifying ownership over digital artworks which is cheaper than any blockchain and devoid of financial conflicts of interest. These are very principled people who would never engage in financially-motivated thinking.
This page argues for registering artworks and going to courts to verify full chain of custody, not to mention having digital identities issued by a trusted authority, which is also usually not free.
All combined, this is a lot more expensive solution, not to mention a lot less global and time-intensive.
This is explicitly satire criticizing the concept of ownership of goods being derived from arbitrary tokens rather than defined by the extant legal framework in virtually every jurisdiction. From the end of the article:
>Q: Is any of this for real?
>A: No. Good lord. If you want to protect your digital rights, hire a lawyer. If it wasn't immediately clear that this is a work of satire, we've got some NFTs to sell you.
Check out, also, Writers Guild of America West.[1] They provide an online service for registering a file of up to 10MB. IIRC the fee is $25 or $50. The result is legal evidence, acccording to them.
One use case, so I heard: Rather than showing a copyright date on an old script (which can date it and suggest is has been rejected many times), the cover page can specify "Registered with WGAw"
- register and embed ISRC code that have been around since the late 80s into your recording to automatically handle licensing fees and track sales
- send registered letter containing the recording and any associated contracts to yourself and never open it (or to a bank safe or lawyer or something if you want to get fancy)
It's not sexy tech, but holds up in court. Doesn't solve all the problems the crypto world products claim to solve, but then again, the mechanics of getting paid is about the least of problems for artist imho.
> No. Mere possession of bytes does not prove ownership of a work, as many casual music pirates discovered during the early aughts. The more important question is "do I even own the artwork being right-clicked to begin with?" If you bought an NFT, you probably don't.
[...]
> There is no trustless way to prove ownership. If push comes to shove, you will need to appear in a court of law and identify each person on the chain of custody. So you can trust it as must as you trust each individual participant.
----
The point, which
- many artists who have had their work stolen and minted without their permission have already realized,
- many owners who found out that NFTs can get scammed away from them have already realized,
- many users who are now grappling with platform decisions about what sales to allow have already realized,
- many owners who are trying to navigate what exactly they are legally allowed to do with their NFT tokens have already realized,
is that NFTs don't actually get rid of any of the legal problems or systems, and in fact often are completely subservient to those systems. For example, BAYC itself:
> The BAYC license states "You Own the NFT. Each Bored Ape is an NFT ... you own the underlying Bored Ape, the Art, completely." The license then goes on to place any number of restrictions on its use, implying that you don't, in fact, "own" the "underlying Art" at all.
NFTs don't solve the fundamental problem of trust, they only solve the problem of a shared ledger. And it turns out that they don't even solve the problem of trust in that ledger, and the community seems to be pretty split on questions like whether someone who steals an NFT from someone else "owns" it or not.
A lot of the NFT hype about distributed consensus boils down to "the code is law, except for these exceptions when it's not, and except for when the code has a bug, and except for when the real law steps in and threatens to send someone to jail." In short, if the answer to "how do I know an NFT is legitimately issued by the artist who made the artwork" is "community consensus/law", then the blockchain isn't actually solving the problem of ownership, the community/law is.
"That's My Ape" offers transparent, user-facing reliance on a system that everyone in the NFT space is already relying on anyway.
After all, it is very easy to solve the "double spend" problem without the use of a blockchain: simply use a single trusted authority.
You know how every time you buy a house or piece of land you have to get a state-licensed notary to verify your identity, And then after signing the deed you have to send the paperwork to the county registrar because if they don't write it in their books then the land hasn't actually changed hands? That was NFTs working fairly well long before the invention of blockchain or computers or cryptography.