I was really hoping they were going to dunk on the technology itself, like how the media of the NFT is lost if the platform hosting it is ever compromised - only the meta data is stored on the blockchain.
Instead, they just attacked the contents of the NFTs, akin to my mom telling me my pokemon cards are a waste of money all those years ago. Value is only whatever someone is willing to pay.
The metadata is an IPFS hash in most cases that you can use to validate against the file regardless of where the file is stored. At any rate NFT market places are working on surfacing quality data to users to show them this information. Some NFTs are small enough to be embedded on-chain. Some use IPFS + Filecoin or other decentralized archive service like Arweave. Some don't. Surfacing that to users will become more important as the space evolves.
The metadata only contains an URI to where the actual information lies (says ERC-721). So as long the URI stays, the hash stays. And then you go and modify the contents of the pointed file and lo, instead of a Picasso you own now a lolcat. Or the file gets simply removed because the hoster went bankrupt or lost the backups after a crash and you're left owning... yeah.
The contents seem much more stupid than the metadata issue. If you're going to claim "ownership" over an arbitrary "thing" pointing to it with metadata is a reasonable method. Its the claiming "ownership" over arbitrary crap that's stupid.
It's important to remember that these people are also the kind of industry personalities that would speak at and participate in a conference run by an organization in 2004 that backdoored their crypto products for government bribes.
I'm of the belief now that those associated with the RSA conference are more interested in the publicity/reach of the conference than anything technical. They've pretty firmly positioned themselves outside of technology and far up the orifice of "industry" now. Maybe it's worth watching for policy wonks, but I skip the whole thing.
Well, the conference essentially just borrows the name, in effect. The conference is highly vendor oriented, unlike Blackhat or Defcon. The speakers, however are RSA themselves. Keep in mind that they are no longer associated with the company.
And the theme "crypto means cryptography" is a losing battle, I think.
The ArtBlocks webpage says they use the (same usual) ERC721 standard - which only stores the URI on chain. Can you please point to your information source?
> Certainly it's not harmful — some people collect coins, some people collect stamps, some people collect NFTs. If they want to pay money for this, it's fine with me.
Exactly. If someone makes some purposeless set of objects and others buy and sell them and money is lost and gained by informed adults in the process then.. nothing?
If one thinks that NFTs are inherently a BAD THING then it may be more accurate to say that it is a bad thing that humans are easily persuaded to acquire shiny things and things they think will rise in value.
If so, the problem lies in human nature.
Energy expense of NFTs is not covered in the article.
I believe there are many that don't understand that NFTs don't represent ownership in anything yet they are billed as such. From NBA Top Shot: "you get to own and show off the highlights that matter". Except, the NBA owns all the footage and the rights. Do you get to sue the NBA if they bin Top Shot? If so, what would you get? Nobody was angry with Crypto Kitties. It was clear what exactly you had. But NFTs are simply a means for people to strip the token of anything of value and yet get to market it behind a veil of complexity to prey on those who don't understand.
I think this is a good point. One of the main problems with new products and technologies is the inherent asymmetry of information: the producers know and the consumers sometimes don't.
However, this is a problem to be addressed by the FTC and it isn't something unique to NFTs. False advertising applies.
That being said, unfortunately it may be the case that many consumers are just ignorant of what they're buying in general (not including NFTs).
Because NFT's have nothing to do with collecting digital trinkets and everything to do with money laundering. The only thing that is remarkable about NFT's is how absolutely brazen they're being about it. The only positive is that hopefully it will keep them from screwing around with the housing market that has real life consequences for people although now we're just throwing away electricity rather than empty houses.
acquire Ethereum with dirty money -> buy NFT's -> sell NFTs for Ethereum -> sell Ethereum for USD -> deposit USD in bank account
I fail to understand how that is materially different from:
acquire Ethereum with dirty money -> sell Ethereum for USD -> deposit USD in bank account
Besides there being more steps with NFTs, I don't understand how it would attract less scrutiny.
In both cases, one must acquire Ethereum in the beginning with dirty money. This can be done on a foreign exchange, transfer in the Ethereum to a domestic exchange and sell it for USD.
In both cases, large deposits in bank accounts will be flagged by banks for review by the authorities. It's not a very good idea.
Arguably, USD stablecoin is a much more efficient method. Just buy them, and sell them off slowly and deposit the USD in ways to avoid scrutiny. This can't be done with Ethereum because of the volatility: you can't wait because your money might lose a ton of value.
If wealthy people are going to use artwork to launder money, I'm happy with the original artist getting a cut. This already supposedly happens in meatspace, just with the artist making nothing after the original sale and missing out on most of the eventual value.
Agreed, would be easier to agree that they're harmless enough if the energy use aspect had been addressed.
But also isn't it a little crazy to think about how many unestablished / small-time artists are dropping $50~$150 on minting NFTs that might never even sell. And how their participation just drives the hype engine and makes the whole thing look like even more of a thing?
I think a non-zero portion of the criticism is actually a criticism of collecting in general. If you think collecting things is dumb, you will think NFTs are dumb by default.
I'm sure people will come up with a new bullet point to demonize NFTs after that. Not that there isn't a laundry list of things that are wrong with them, but the alleged environmental impact is the least of such issues yet it's the easiest to "understand" and so it overtakes any kind of discussion.
I don't mean to distract from the main conversation, but I want to talk about how insidiously evil it is that NFTs can be coded to send the original creator a percentage $ cut off of every subsequent transaction for all time.
If that's not hard coding wealth inequality and a new class of asset owners, I don't know what is. This is disturbing, along with the whole thing itself anyway.
The people receiving royalties are the artists in these cases – instead of the record companies, instagrams, and etsys of the world. I fail to see how this won't be a net positive for wealth equality when we're shifting the advantage to those who have historically been taken advantage of.
> The people receiving royalties are the artists in these cases...
This is just factually incorrect. I don't know why there's so much confusion here... it's the creator of the NFT that controls where the money goes, not the creator of the artwork. I don't know why people think that it's the artist that gets the money--that doesn't make any logical sense--how would a system like that even work?
This is not a property of NFTs, but rather of new, unproven technologies. If NFTs "make it big", there will be plenty of middlemen that spring up to "help" artists sell NFTs while owning the IP rights and collecting royalties.
There's a difference between making royalties for distribution of copies of an item and making royalties for transferring a single item from one person to another. One makes sense, the other is a weird misleading way to rent to people.
These are not royalties. Royalties are paid when you buy a copy of a copyrighted work. And your not paying royalties again if the previous owner has already paid them.
I have never heard this take before, you actually think it's evil? Insidiously so? I honestly can't even conceive of what your argument is.
First off, the facts are a bit off, NFTs cannot currently contain hardcoded royalties (or whatever you call it). Right now it is voluntarily paid by the marketplaces that sell NFTs. But I think at some point it will evolve to be guaranteed. Sort of.
But either way, if it's all transparent, then why is it evil? Maybe it acts as a deterrent of sales in the future, but I like that it can be controlled by the creator. It's everyone else's choice on whether to buy it, or whether that constitutes ownership. If you don't like it, don't buy it.
Evil? Really? I don't get it at all. Not one single iota. But, willing to hear your argument for that. "Hardcoding wealth inequality" is hardly an argument. It's not like there are a ton of people creating a new superclass of rich artists. There are a few, but that isn't the way it will shake out long term. At least, any more than traditional art.
Is all wealth inherently evil to you? Maybe that's your argument? I guess that's it?
On your "imagine if cryptocurrency started doing that", I am sure there are cases where this happens. ZCash is one where 10% of mined blocks go back to the original investors and founding team. Not sure how I feel about that, I do think it's high, but I certainly don't think it's evil. If people don't like it, they won't use it, and something will take its place. No biggie.
Isn't this essentially what proof of steak is? A tax on all transactions proportional to how much you already own, but disproportionately applied to smaller users.
That last bit is key. Speaking of Ethereum for a second - the largest asset owners will be institutions which can transact off-chain, which means that fees are being payed more often by folks that don't have that kind of scale.
First we had proof of work, and it consumed all the world's processing power. Then we had proof of space, and it consumed all the world's data storage. Then we had proof of steak, and it consumed all the world's food. Thus ended humanity.
You can just wrap the NFT inside a holding contract, then trade access to the holding contract without triggering an actual sale. At least on ethereum you can do this.
I believe this is wrong. Creator percentage isn't coded into the Ethereum-based NFT's themselves, it's done at the marketplace level. Currently, if you bought an NFT on Foundation and sold it on Opensea, there isn't a way to encode directly into the NFT a guarantee Foundation's royalty agreement would be followed.
EIP-2981 is the draft protocol-level NFT royalty implementation, but you will note that it's opt-in and NFT marketplaces do not need to respect it (although theoretically they could be blacklisted/sued). It explicitly outlines why a non opt-in implementation wouldn't work:
> It is impossible to know which NFT transfers are the result of sales, and which are merely wallets moving or consolidating their NFTs. Therefore, we cannot force every transferFrom() call to involve a royalty payment, as not every transfer is a sale that would require such payment. We believe the NFT marketplace ecosystem will voluntarily implement this royalty payment standard to provide ongoing funding for artists and other creators, and NFT buyers will assess the royalty payment as a factor when making NFT purchasing decisions. [0]
The only non opt-in royalty percentage implementation I know of is Euler Beats, but that royalty percentage only applies to printing new NFTs through their bonding curve. If you bought an Euler Beat print through a third party, you could simply use the safeTransferFrom function and avoid royalties entirely.
As someone pointed out in this thread, this arrangement is very common for high end art already, since it helps keep incentives aligned between collectors and the artists.
I am an author of this EIP. You are correct. It is impossible to enforce unless the chain itself has NFT trading as part of a core feature. Otherwise it’s the honor system. But IMO this will be quite successful given the social pressure.
pardon my ignorance but how exactly does it force royalties to transfer? couldn't a owner just transfer the underlying etherum coin that is used for the NFT to another wallet address just like any other ethereum coin? and likewise exchange it in a new smart contract?
This is about as easy to enforce on the blockchain as it is in meatspace...
All you have to do is "wrap" the NFT in a smart contract, then move the smart contract around. The NFT itself is not moving (its owner is the smart contract) so it won't trigger the fee.
Some artists choose to attach "perks" to their NFTs – i.e. meet and greets, access to private communities. They could choose not to honor these perks for NFTs held by contracts. They could even choose to re-mint the work if the new owner is doing nefarious things with the old one (though many would see this as a dubious action)
Can you embed a smart contract in an NFT so that if you wrap or otherwise sell outside of the initial chain, it’s null and void and the rights revert back to the creator to auction again?
Artist sells painting for $1k. Buyer then sells painting for $1M. Next buyer sells for $10M. Original artist only made $1k on a $10M painting. Shouldn't the original artist be able to participate in the upside of their creation?
I'm not seeing the "evil" here. Just a way for creators to cut out the middle men. Or, just a different way of structuring a contract.
There's a lot of moralistic FUD against crypto on HN right now. Feels very much like a coordinated propaganda campaign.
Do you feel the same way with collectible cars? Every time a 69 Thunderbird is sold, Ford should get a cut in the upside? How do you feel about the inverse? If a painting goes down in value, is the artist on the hook for the downside of their creation? The answer is no, the creator handed over the creation on sale. Anything else would need to be hashed out in a contract which would drastically reduce sale price.
That's not how things are supposed to work AFAIK. I go buy a book, DVD, CD, video, etc for $10. I can then resell it for $8 or if it becomes rare for $20. The original creator only gets the first $10
Behind the scenes the NFT is just a smart contract standard. The royalty isn't really baked into the contract itself, but the platform that's using to exchange it.... So lots of projects with this perpetual royalty might get moved to another platform like opensea or rarible, and the royalty goes poof.
Also, the royalty is just artists getting commission on their work. Most NFT minting platforms worth anything allow the artist to mint from their wallet.
You can still copy the underlying data however you like - if the NFT says http://example.com/foobar.jpg you can just do `wget http://example.com/foobar.jpg`, regardless of whether you've even seen the NFT, and assuming you can access foobar.jpg at all, you can then copy it however you like.
> but I want to talk about how insidiously evil it is that NFTs can be coded to send the original creator a percentage $ cut off of every subsequent transaction for all time
First, in the real world, creators stop getting royalties after the item expires and goes into the public domain, and there's a pretty strong view that the time for that is already too long and the beneficiaries of that long period tend to be companies instead of creators. I would say that there is in fact a widespread belief that the heirs of Walt Disney are too wealthy, despite the fact that Walt himself was a creator.
Second, there's no reason to believe this won't lead to the exact sort of mechanisms that plague existing royalties - e.g., a young singer makes a (smart) contract with a recording studio to have the studio count as the "creator" of the work as far as the contract cares, and the singer is just performing work for hire, in exchange for marketing, promotion, initial funding, and connections. A singer who has absolutely no resources but their talent is probably going to say yes to that, because it's better for them in the short term than going it alone, and the odds are against them (not every talented young singer can become famous). But the profits continue to flow to the recording studio for all time.
Not quite. Copyright prevents Bob from misappropriating Alice's work. E.g., Bob purchases a painting from Alice for $100. Bob can not legally now use that painting as a source to make and resell copies.
But Bob can sell the original painting to Charlie for $200 and pocket the entire $200 from Charlie. Alice has nothing to do with that sale, and does not profit from any subsequent sale.
But if Alice sold Bob and NFT instead, when Bob sold it to Charlie, perhaps $180 of Charlie's money would go to Bob and $20 would also go to Alice.
And this would hold true for every future sale, so when Alice died and became a famous dead artist and her works sell for $200K, her estate gets $20K, etc.
To me, this is the sole redeeming value of NFTs, but only if artists can actually keep those rights and revenue streams. The usual path of such things is that middlemen insert themselves to engage in their usual rent-seeking behaviors.
just sounds like automated royalties to me (with infinite copyright). AT least when an NFT does this, it is known in advance; as opposed to legistative action changing the goal posts during the match.
Also, I suppose there can be a way to cancel the royalties by making a meta-NFT (of sorts) that "owns" the NFT which stays in one place forever so that the meta-NFT can be traded instead.
The NFT thing seems to be settling out. It's for collectables, like Magic, the Gathering cards.
I've been following this because I'm interested in virtual worlds. There are at least four virtual worlds that use some kind of NFT thing to register land ownership. Nobody does much in those worlds, and the graphics aren't all that good. It's all about trading land and speculating in some minor cryptocurrency.
The newest entrant - Zero Space.[1] The actual 3D world is promised for 2024. They already have five cryptocurrencies of their own, plus an NFT system. Their "3D world" is a simple un-shared Unreal Engine demo. They claim they will have a high-resolution metaverse, but show no indication that they have any idea how to build one.
I see NFTs as more like a gimmick which reminds me of the million dollar homepage, but pretending to be more than what they are by associating themselves with "ownership".
Even for collectables it doesn't really make any sense. It's not like you have to own a Black Lotus to sell a NFT of it. Nor is there any benefit to collectors in buying the NFT except for the possibility of finding a bigger sucker somewhere down the line to buy it off of them.
'To own the SKEPTI from this transaction or any derived transaction is to "own" 1600 Pennsylvania Avenue NW, Washington, DC 20500. (AKA the White House). #metaverse'
Pretty clear what their priority is. It's not building a good game, it's making money off of suckers.
Yes, I get that feeling. They have a long, detailed story, but it gets vague around how things actually work.
There are useful metaverse design problems cryptosystems might address. You'd like to be able to move your avatar/furniture/vehicles/house from Roblox to Minecraft to Second Life to Facebook Horizon to Dual Universe or whatever comes next. Since much of that stuff is bought, the creators don't want you to be able to duplicate and resell it. Some kind of cryptosystem might be able to make virtual asset portability work.
You'd like to have a virtual world system that has multiple servers run by different organizations, yet can talk to each other. Like the Web.
The walled gardens need portals to other walled gardens. Many of the problems doing that require permission and asset storage with no central authority.
Asset storage separate from virtual world operators could work. Arweave could potentially help with that. Arweave is a scheme where you pay about $10/GB to have a file supposedly stored forever. It's paid for by a speculation in declining storage prices. But the terms and conditions are highly inconsistent with the hype. And there seems to be a central point of failure in the way files are looked up.
Nothing I've seen from the NFT crowd seems to be addressing those hard problems. It's all Make Money Fast.
The tulip comparison strikes me as being rather specious. For starters, tulip bulbs of the same variety were absolutely fungible.
It's more like trading cards. If you own some rare rookie card, you don't actually own that baseball player, just a sort of paper token that references the baseball player. But, since people see value in the reference itself, the value of the token ends up deriving from both the player's celebrity and the rarity of the baseball card.
NFTs riff on this concept by being digital, and having it be common for there to be limited runs of only 1.
What I dont understand is what stops you from minting the same thing on multiple NFT blockchains and why is it any diferent than something centralized, and thats why I dont like all the NFT hype
There is nothing that stops you from making the same NFT on multiple blockchains. Even within the same blockchain there is nothing that stops you from creating a new NFT with the same NFT payload. NFTs are only unique in the same blockchain within the same smart contract. Which is a very narrow definition of unique.
Yeah I’m confused about this as well. Especially since tons of NFTs are images, couldn’t you just change 1 pixel to change the hash and make a new NFT?
I understand the decentralized nature of the blockchain, but couldnt I mint the same painting on multiple blockchains?
I'm not an expert, but I can see the value on cryptocurrencies and ETH and all the smart contract tech. But I can't see the same value on NFTs, as more than speculation.
Because the NFT is only as good as the blockchain it was minted on. The vast majority of (valuable) NFTs are minted on Ethereum. If someone mints the same NFT on Flow for example, it won't be as valuable because it's a copy (verifiably so) and it's secured by a centralized chain. NFTs are supposed to live on as if they were physical objects, so minting an NFT on a centralized chain has a significant risk of not existing in the future.
I get the difference between different blockchains, but what I can't see is what value I get when I buy an NFT. As I see it I only get the brag rights of "owning" something on some blockchain and the posibility of reselling that right.
Part of the appeal of collectibles is that they hold their value through time (if they are preserved properly). It's not clear to me if an NFT of today will still exist in 50 years? I assume that it will, but it also implies that people will still be mining the same legacy blockchain then.
Readit News
Instead, they just attacked the contents of the NFTs, akin to my mom telling me my pokemon cards are a waste of money all those years ago. Value is only whatever someone is willing to pay.
https://en.wikipedia.org/wiki/Dual_EC_DRBG
I'm of the belief now that those associated with the RSA conference are more interested in the publicity/reach of the conference than anything technical. They've pretty firmly positioned themselves outside of technology and far up the orifice of "industry" now. Maybe it's worth watching for policy wonks, but I skip the whole thing.
And the theme "crypto means cryptography" is a losing battle, I think.
…I guess NFTs are awesome after all. Where’s my credit card at…
Exactly. If someone makes some purposeless set of objects and others buy and sell them and money is lost and gained by informed adults in the process then.. nothing?
If one thinks that NFTs are inherently a BAD THING then it may be more accurate to say that it is a bad thing that humans are easily persuaded to acquire shiny things and things they think will rise in value.
If so, the problem lies in human nature.
Energy expense of NFTs is not covered in the article.
> informed adults
I believe there are many that don't understand that NFTs don't represent ownership in anything yet they are billed as such. From NBA Top Shot: "you get to own and show off the highlights that matter". Except, the NBA owns all the footage and the rights. Do you get to sue the NBA if they bin Top Shot? If so, what would you get? Nobody was angry with Crypto Kitties. It was clear what exactly you had. But NFTs are simply a means for people to strip the token of anything of value and yet get to market it behind a veil of complexity to prey on those who don't understand.
However, this is a problem to be addressed by the FTC and it isn't something unique to NFTs. False advertising applies.
That being said, unfortunately it may be the case that many consumers are just ignorant of what they're buying in general (not including NFTs).
Deleted Comment
In both cases, one must acquire Ethereum in the beginning with dirty money. This can be done on a foreign exchange, transfer in the Ethereum to a domestic exchange and sell it for USD.
In both cases, large deposits in bank accounts will be flagged by banks for review by the authorities. It's not a very good idea.
Arguably, USD stablecoin is a much more efficient method. Just buy them, and sell them off slowly and deposit the USD in ways to avoid scrutiny. This can't be done with Ethereum because of the volatility: you can't wait because your money might lose a ton of value.
My 2 cents. I am not a lawyer.
But also isn't it a little crazy to think about how many unestablished / small-time artists are dropping $50~$150 on minting NFTs that might never even sell. And how their participation just drives the hype engine and makes the whole thing look like even more of a thing?
If that's not hard coding wealth inequality and a new class of asset owners, I don't know what is. This is disturbing, along with the whole thing itself anyway.
Imagine if cryptocurrency started doing that?
This is just factually incorrect. I don't know why there's so much confusion here... it's the creator of the NFT that controls where the money goes, not the creator of the artwork. I don't know why people think that it's the artist that gets the money--that doesn't make any logical sense--how would a system like that even work?
First off, the facts are a bit off, NFTs cannot currently contain hardcoded royalties (or whatever you call it). Right now it is voluntarily paid by the marketplaces that sell NFTs. But I think at some point it will evolve to be guaranteed. Sort of.
But either way, if it's all transparent, then why is it evil? Maybe it acts as a deterrent of sales in the future, but I like that it can be controlled by the creator. It's everyone else's choice on whether to buy it, or whether that constitutes ownership. If you don't like it, don't buy it.
Evil? Really? I don't get it at all. Not one single iota. But, willing to hear your argument for that. "Hardcoding wealth inequality" is hardly an argument. It's not like there are a ton of people creating a new superclass of rich artists. There are a few, but that isn't the way it will shake out long term. At least, any more than traditional art.
Is all wealth inherently evil to you? Maybe that's your argument? I guess that's it?
On your "imagine if cryptocurrency started doing that", I am sure there are cases where this happens. ZCash is one where 10% of mined blocks go back to the original investors and founding team. Not sure how I feel about that, I do think it's high, but I certainly don't think it's evil. If people don't like it, they won't use it, and something will take its place. No biggie.
Isn't this essentially what proof of steak is? A tax on all transactions proportional to how much you already own, but disproportionately applied to smaller users.
That last bit is key. Speaking of Ethereum for a second - the largest asset owners will be institutions which can transact off-chain, which means that fees are being payed more often by folks that don't have that kind of scale.
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It happened, that's SafeMoon. Sounds like a Ponzi scheme? That's their selling point!
EIP-2981 is the draft protocol-level NFT royalty implementation, but you will note that it's opt-in and NFT marketplaces do not need to respect it (although theoretically they could be blacklisted/sued). It explicitly outlines why a non opt-in implementation wouldn't work:
> It is impossible to know which NFT transfers are the result of sales, and which are merely wallets moving or consolidating their NFTs. Therefore, we cannot force every transferFrom() call to involve a royalty payment, as not every transfer is a sale that would require such payment. We believe the NFT marketplace ecosystem will voluntarily implement this royalty payment standard to provide ongoing funding for artists and other creators, and NFT buyers will assess the royalty payment as a factor when making NFT purchasing decisions. [0]
The only non opt-in royalty percentage implementation I know of is Euler Beats, but that royalty percentage only applies to printing new NFTs through their bonding curve. If you bought an Euler Beat print through a third party, you could simply use the safeTransferFrom function and avoid royalties entirely.
As someone pointed out in this thread, this arrangement is very common for high end art already, since it helps keep incentives aligned between collectors and the artists.
[0] https://eips.ethereum.org/EIPS/eip-2981#universal-royalty-pa...
All you have to do is "wrap" the NFT in a smart contract, then move the smart contract around. The NFT itself is not moving (its owner is the smart contract) so it won't trigger the fee.
I'm not seeing the "evil" here. Just a way for creators to cut out the middle men. Or, just a different way of structuring a contract.
There's a lot of moralistic FUD against crypto on HN right now. Feels very much like a coordinated propaganda campaign.
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https://en.wikipedia.org/wiki/First-sale_doctrine
Also, the royalty is just artists getting commission on their work. Most NFT minting platforms worth anything allow the artist to mint from their wallet.
Deleted Comment
This is not accurate.
First, in the real world, creators stop getting royalties after the item expires and goes into the public domain, and there's a pretty strong view that the time for that is already too long and the beneficiaries of that long period tend to be companies instead of creators. I would say that there is in fact a widespread belief that the heirs of Walt Disney are too wealthy, despite the fact that Walt himself was a creator.
Second, there's no reason to believe this won't lead to the exact sort of mechanisms that plague existing royalties - e.g., a young singer makes a (smart) contract with a recording studio to have the studio count as the "creator" of the work as far as the contract cares, and the singer is just performing work for hire, in exchange for marketing, promotion, initial funding, and connections. A singer who has absolutely no resources but their talent is probably going to say yes to that, because it's better for them in the short term than going it alone, and the odds are against them (not every talented young singer can become famous). But the profits continue to flow to the recording studio for all time.
But Bob can sell the original painting to Charlie for $200 and pocket the entire $200 from Charlie. Alice has nothing to do with that sale, and does not profit from any subsequent sale.
But if Alice sold Bob and NFT instead, when Bob sold it to Charlie, perhaps $180 of Charlie's money would go to Bob and $20 would also go to Alice.
And this would hold true for every future sale, so when Alice died and became a famous dead artist and her works sell for $200K, her estate gets $20K, etc.
To me, this is the sole redeeming value of NFTs, but only if artists can actually keep those rights and revenue streams. The usual path of such things is that middlemen insert themselves to engage in their usual rent-seeking behaviors.
Also, I suppose there can be a way to cancel the royalties by making a meta-NFT (of sorts) that "owns" the NFT which stays in one place forever so that the meta-NFT can be traded instead.
Dead Comment
I've been following this because I'm interested in virtual worlds. There are at least four virtual worlds that use some kind of NFT thing to register land ownership. Nobody does much in those worlds, and the graphics aren't all that good. It's all about trading land and speculating in some minor cryptocurrency.
The newest entrant - Zero Space.[1] The actual 3D world is promised for 2024. They already have five cryptocurrencies of their own, plus an NFT system. Their "3D world" is a simple un-shared Unreal Engine demo. They claim they will have a high-resolution metaverse, but show no indication that they have any idea how to build one.
[1] https://www.zero.space/
https://en.wikipedia.org/wiki/The_Million_Dollar_Homepage
The first four didn't create the speculative frenzy they were hoping for, huh?
Just kidding(?)
https://github.com/skepticoin/explorer/blob/master/00038cce6...
'To own the SKEPTI from this transaction or any derived transaction is to "own" 1600 Pennsylvania Avenue NW, Washington, DC 20500. (AKA the White House). #metaverse'
Pretty clear what their priority is. It's not building a good game, it's making money off of suckers.
Yes, I get that feeling. They have a long, detailed story, but it gets vague around how things actually work.
There are useful metaverse design problems cryptosystems might address. You'd like to be able to move your avatar/furniture/vehicles/house from Roblox to Minecraft to Second Life to Facebook Horizon to Dual Universe or whatever comes next. Since much of that stuff is bought, the creators don't want you to be able to duplicate and resell it. Some kind of cryptosystem might be able to make virtual asset portability work.
You'd like to have a virtual world system that has multiple servers run by different organizations, yet can talk to each other. Like the Web. The walled gardens need portals to other walled gardens. Many of the problems doing that require permission and asset storage with no central authority.
Asset storage separate from virtual world operators could work. Arweave could potentially help with that. Arweave is a scheme where you pay about $10/GB to have a file supposedly stored forever. It's paid for by a speculation in declining storage prices. But the terms and conditions are highly inconsistent with the hype. And there seems to be a central point of failure in the way files are looked up.
Nothing I've seen from the NFT crowd seems to be addressing those hard problems. It's all Make Money Fast.
It's more like trading cards. If you own some rare rookie card, you don't actually own that baseball player, just a sort of paper token that references the baseball player. But, since people see value in the reference itself, the value of the token ends up deriving from both the player's celebrity and the rarity of the baseball card.
NFTs riff on this concept by being digital, and having it be common for there to be limited runs of only 1.
(I may be dumb and dont get what NFTs really are)
There's nothing stopping you, but your print is worthless and the original is valuable.
The fact that the NFTs use the ETH blockchain makes it decentralized. A single authority issuing NFTs would be centralized.
I'm not an expert, but I can see the value on cryptocurrencies and ETH and all the smart contract tech. But I can't see the same value on NFTs, as more than speculation.
But I may be missing something
Awesome!