I've never seen any compelling argument in favor of NFT. Everything points to it being pure hype with no redeeming value whatsoever, and this is no different. To wit, I don't recall reading even a single comment on HN entirely supportive of NFTs, and there's hardly ever any shortage of contrarians on most topics.
NFT's applied to real world things or stuff like video clips does seem kinda silly. You are right, NFT seems geared towards things with no redeeming value whatsoever ... in the real world. Video games have had the concept of tokens for decades and those even have printed on them that they aren't redeemable. That is why NFT and video games are a perfect combination, possibly industry changing.
Think of it in terms of an operating arcade. A video game NFT is like a special physical token only you can own (or maybe limited numbers of them) and when you drop it into a game, it gives you a unique item, exchanges for currency in-game, etc. If this is what GameStop is doing, they could be the backbone for all of this - the token machine at the arcade. Or the token machine for every arcade.
I think NFT might become a marketable term for things that aren't an actual crypto currency but use blockchain simply because there is a lot to unpack and understand to explain to someone like a grandma. Some possible uses based on my limited understanding of NFT's/blockchain:
- Revenue sharing of second hand digital games with developers. If a game purchase is an NFT and gets resold, my understanding is there is the possibility for royalties to go back to the original owner. This would make second-hand games a very profitable business for GameStop and game developers.
- Novelty/Collectibles - say a sports star purchases a digital game as an NFT, sells it at auction for charity and now someone gets to own the single copy of that game that sports star owned, with a one of a kind in-game item.
- In-game currencies, cross platform, cross-game. You have a stack of tokens usable across anything. Kinda like old school arcades. Yeah that's not NFT more of a wallet concept, again think of NFT as a marketing concept.
If I own the arcade I can authenticate tokens in amortized constant time with a centralized ledger. It's also private so I don't leak details of my tokens to anyone, including my customers and competitors.
If I have a decentralized ledger I can authenticate tokens in (at least) linear time with the total number of tokens I have ever distributed. The ledger is also public so competing arcades know intimate details of my business. In some cases they might even know which games are most popular. My customers will also know the relative scarcity of tokens and how much they should be valued, potentially limiting my profits.
Why should I use a decentralized ledger for my arcade?
If you are thinking of it as a game store like Steam, then broaden that thought to include in-game collectibles, currencies, character skins, etc. You'd want a public, transparent marketplace for players to buy/sell/trade based on whatever public value people assign to those items.
NFT's provide a mechanism (as I understand it) for royalties to creators. If this is implemented for games, then second-hand sales are entirely possible for a digital game. I don't think that's possible today.
I don't know that centralized/decentralized matters much to gamers, I would imagine most users would be signing into a web site with an account that manages all of that behind the scenes.
> NFT's provide a mechanism (as I understand it) for royalties to creators. If this is implemented for games, then second-hand sales are entirely possible for a digital game. I don't think that's possible today.
There's nothing preventing this today, and nothing NFTs solve that would force those features to be supported. It can be done with a centralized ledger (a database hosted by the marketplace implementer, like Steam). I don't see the incentives for the marketplace platform to implement itself in terms of NFTs.
However, I could see game developers and gamers have uses for NFTs using a decentralized ledger to cut out the marketplace vendors from the transactions (or requiring transactions take place only on their systems).
I can see the business appeal of the prospect of being able to skim off the top of second hand sales while maintaining a thread of DRM enforcement along the way, but it's pretty cynical and at the expense of consumers.
Most other uses, like whether some particular series of bits have been blessed by a particular person and to the benefit of whom, seem to already have been solved by the nonrepudiation of digital signatures.
It appears to me that the distributed and public properties of the block chain are not being used for good here.
> being able to skim off the top of second hand sales
Steam's current strategy of "no second hand sales" (but better sales and distribution instead) really beats anything NFT has to offer and doesn't require forcing a blockchain and mintinv fees into the scenario.
If they wanted people to be able to resell titles while taking a cut, they could easily facilitate that now. Why would Valve turn to NFTs to solve that problem?
The basic idea is that distributed ledgers, tokenization, and smart contracts are enabling new paradigms for what it means to "own" digital property — in such a way that it is provably secure, transparent, and decentralized (i.e. built on distributed trust).
The other important aspect is that these systems and their tokens are programmable: "NFT" is just a standard set of functions within a blockchain smart contract, but new markets are emerging that explore alternative uses of the same tech, such as governance and/or entrance tokens that allows holders to participate in decentralized structures (multi-signature collaborative wallets, DAOs, etc).
Here's two interesting & positive examples off the top of my head:
EDIT: I should say I haven't looked at this OP's GameStop link, and there is tons of junk and unnecessary ideas in the NFT/crypto space. But if you look beyond the mainstream media headlines you may find the technology interesting.
The problem I have grokking is the actual practical issue of digital ownership, which is that it is nonsensical.
In this context ownership merely defines who has the right to be the seller in a transaction. As far as I understand this, blockchains don't handle the issue of duplication, where it doesn't matter who has the rights to begin a transaction - anyone can still access the bits.
For something like currency which is entirely defined by its ability to be used in transactions then the application of blockchain to define ownership is obvious. For something like media, where ownership is not just transactions but also access, it isn't obvious to me at all.
In other words, blockchains and smart contracts handle authenticity of a piece of data when used in transactions. That's valuable for data that is defined by its ability to be transactional. It's not necessarily valuable for data that needs to be more than that.
I would also contend that it's not secure by all definitions.
In the context of blockchain tokens, “digital ownership” is equally as nonsensical as owning a fine art print with ink and a pencil signature on it. These artefacts, and the ideas of ownership around them, are social constructs.
The mental shift that most struggle with, is that the NFT ownership is not owning the digital image/file/media/bits (which can be copied on any machine, “Right click save as”). It’s probably closer to purchasing conceptual art (see Sol LeWitt), or similar to owning a certificate of authenticity handed to you by the artist. Or, perhaps somewhat analogous to “owning” digital property such as a domain name.
I agree this tech does not magically make everything more secure. But, for example, you can query the “current owner” of a million dollar CryptoPunk - as long as the blockchain survives, the database record will be secure & immutable, and cannot be changed except from the token holder’s own wallet address.
Reading the Solidity code & querying the contract myself helped me understand the value here is not in the digital media file; it’s in the ledger record (or state).
I think you miss the forest for the trees in my comment, which is attacking the semantics of "ownership" of a digital asset, which in blockchains corresponds to "the ability to give ownership to someone else" - or the only kind of ownership that a blockchain provides is the ability for one person to transfer the ownership.
For some assets like currency this is sufficient - currency is only valuable by virtue of the fact it can be transferred.
For art it is not sufficient, since ownership must also cover the ability to be transferred and the ability to view the artwork.
While all of it is a social construct, the semantics of those constructs are very different. My argument here is that blockchains and smart contracts are not sufficient to represent ownership beyond its transfer, which makes it useless as a mechanism to define ownership for assets that need to be more than transferred.
Perhaps this is a narrow view of ownership that will be expanded by NFTs (or, perhaps not - let’s see in a couple years).
I don’t see it all that different than purchasing and therefore owning a conceptual Sol LeWitt artwork, ie: a few written instructions on a scrap of paper, that (eg: if it is lost) can be simply re-written to restore the work.
Your requirements (ability to transfer and view an artwork) are met by many on-chain projects, eg: see Autoglyphs.
Yeah, I'd be interested in seeing a steelman for them. Pretty much everywhere you go, sentiment is nearly 100% negative. I see some value in ideas like using tokens for tickets of some sort, but that would likely use a semi-fungible token system (ERC-1155), not non-fungible tokens (ERC-721).
Something that I haven't seen mentioned in discussions about NFTs (not that I've followed many) is their potential for facilitating money laundering.
It looks like they would provide a value similar to that of certain auction houses where large amounts of suspicious money are regularly transferred in the name of subjectively perceived value [1]. Is there something that I am missing, or could this be a tacitly sought-after (if illegal) potential use of NFTs?
Posted this https://news.ycombinator.com/item?id=26954023 about a month ago. No one cared about it as expected.
The video is the interesting part skip to 13 minutes and 50 seconds.
That address starts with 1337420 lol. I can't help but feel this is timed poorly though. Surely there must be some fatigue towards both gamestop and crypto.
Imagine a digital asset used by a professional gamer in a tournament, you could then auction it for charity and the asset could be used in that game or possibly others. The fact that it's recognized by the game code as a NFT could make it scarce in that game.
It doesn't but I think if it's done right, it has value. I would love to race the exact configuration of a classic digital asset along with physics model from 50 years ago. Porsche unleashed game from 2000 is a good example, there's history and culture there, especially now that digital sports are a thing.
One theory is that Ryan Cohen's lockup expires around then, and they will have reported earnings. Rc is not accepting payment from the firm, so he'll be free to sell his stake then
I think about that A lot. You would need some sort of website that prevents you from creating OP items and also allows the different game makers to create NFTs without breaking other people’s games but allows them all to gain revenue through the creation.
