I think there’s a distinction to be drawn here between:
NFTs as an concept. The possibility that something like NFTs ends up existing and being a substantial market segment.
NFTs that currently exist. The possibility that current NFTs will be worth a lot of money in the future.
Even if NFTs succeed in sense #1 (with NFTs providing some form of decentralized ownership for large markets and lots of value being embedded in NFTs), that doesn’t necessarily imply that they will succeed in sense #2 (with currently-existing NFTs becoming worth a lot and people who hold them making a lot of money).
So there are lots of situations where receipts are pretty important, but increasingly there is a push to have them be digitized, either because it’s just more efficient or the asset itself is digital. For example, suppose you buy a movie through your smart TV.
The problem is these digital receipts tend to either be just downloadable PDFs—easily forged and effectively meaningless—or they’re central databases, which are under the control of the party that owns the database. They can be revoked, lost, made obsolete, etc. Suppose the company that holds my downloaded movie purchase goes bankrupt. Now if I torrent that movie I’m not really breaking the law, or am I? How would I prove that?
A decentralized blockchain system would solve those problems and could be used for proving all kinds of things. “Send us a copy of your diploma”—“here, it’s an NFT”, “send us your invoice to prove you are in warranty”, “here’s the NFT”, “Can you sell me your old copy of Civilization 4?” “Yes, I’ll transfer the NFT to you for $40″.
The potential to store trusted receipts has so many useful applications, we’re just not quite there yet in terms of building it.
I’m confused as to how NFTs ‘really’ solve any of the problems you mention (or similar ones I can imagine).
My understanding is that ‘blockchains’ are, today, pretty centralized, especially effectively (i.e. in practical ways that matter). Any particular ‘blockchain’ also seems possibly ‘lost’ (e.g. abandoned), ‘made obsolete’, etc.. Isn’t there any inherent and inevitable ‘social expense’ that has to be continually made anyways?
Suppose the company that holds my downloaded movie purchase goes bankrupt. Now if I torrent that movie I’m not really breaking the law, or am I? How would I prove that?
I don’t think any current ‘movie purchases’ work like what you describe. It certainly seems like it matters as to whether any ‘movie company’ would be willing to offer movies for sales on the terms you seem to be implicitly assuming, e.g. be able to download a movie an unlimited number of times. Does – today – reasonable evidence of having purchased a movie, e.g. as a DVD or Blu-ray disc, serve as protection or a legal defense to later downloading it thru some other means? I don’t think it does. I’m very skeptical that the companies that sell products like this would willingly offer terms like what you seem to have in mind, e.g. ‘Pay us and then just torrent the movie whenever you want!’.
“Send us a copy of your diploma”—“here, it’s an NFT”
This is the most interesting example, but I’m skeptical that even it would work that great. (I do admit I’m ignorant of even the gross technical details about how the example would work ’mechanically.)
Is this resilient in the face of, e.g. losing access to whatever ‘wallet’ the NFT is associated with (on either ‘side’)? How would the person or organization requesting someone’s diploma verify that the NFT was issued by the relevant college/university?
“send us your invoice to prove you are in warranty”, “here’s the NFT”
Surely some kind of centralized database is still required, right? Wouldn’t the entity requesting the invoice need to have some kind of ‘whitelist’ of entities that are approved to issue these NFTs?
“Can you sell me your old copy of Civilization 4?” “Yes, I’ll transfer the NFT to you for $40″
I’m not sure that this meaningfully improves anything. Without some kind of ‘DRM’ (which mostly doesn’t, and probably can’t work generally anyways), this just seems like a more convoluted way to ‘paywall’ a download endpoint.
My understanding is that ‘blockchains’ are, today, pretty centralized, especially effectively (i.e. in practical ways that matter). Any particular ‘blockchain’ also seems possibly ‘lost’ (e.g. abandoned), ‘made obsolete’, etc.. Isn’t there any inherent and inevitable ‘social expense’ that has to be continually made anyways?
Not really. The blockchains themselves are decentralized, but the applications built on top of them are centralized. To my buying a movie example, suppose I have an app on my SmartTV called “stream1” that lets me buy movies and register them via NFT (cool). I would prefer that to buying them from say Amazon Prime which did not have NFTs, even if it cost an extra dollar or two. 5 years later, stream1 shuts down. I’m not saying I would actually go torrent the movie. What might happen instead is that a new company starts up called “stream2″ which allows you to play movies you’ve bought in the blockchain, as well as buy new movies. Or maybe Amazon prime has added the feature by then and I can connect my licenses to their service. This is equivalent to a new company coming out that sell Blu-ray players. You already own the Blu-rays, they’re offering you a way to play them.
I’m very skeptical that the companies that sell products like this would willingly offer terms like what you seem to have in mind, e.g. ‘Pay us and then just torrent the movie whenever you want!’.
But this is precisely what we had before the internet. We used to have physical media that (theoretically) could be copied to multiple devices. You weren’t legally allowed to, but the technology left you in control. I know gamers as a group want this control back after getting shafted by video game companies.
How would the person or organization requesting someone’s diploma verify that the NFT was issued by the relevant college/university?
...
Surely some kind of centralized database is still required, right? Wouldn’t the entity requesting the invoice need to have some kind of ‘whitelist’ of entities that are approved to issue these NFTs?
No not at all. The blockchain can do this. The blockchain contains information about who minted it. So a hiring company—say, Google—would know which wallet MIT used for minting their diplomas. If it came from that wallet, then it’s legit. In the long run, applications could create a more user-friendly layer. So you paste in the relevant info to your job application, and Google’s HR database automatically verifies it on the blockchain.
this just seems like a more convoluted way to ‘paywall’ a download endpoint.
Definitely it seems like a paywall because it is a paywall. Just a more balanced one. As it is, any time you join any kind of DRM or paywall scheme, you’re completely at the mercy of the content host, who can remove your rights to all the stuff you “bought” at any time.
I think this is where there’s been a beanie-baby craze with this stuff on the supply side—where some parties are eager to just sell more because there’s a new channel. When in fact, what we have is a better channel, and we need to move old sales onto the new channel.
Sure, existing markets won’t like it—because they lose control. But it’s comparable to how Netflix disrupted Cable TV. People liked the way Netflix served the content better, and cut their cables. Then they became too big to ignore, and all the major content owners got on board. I could see this happening with NFTs too. If I went to buy some digital content and there were two competing marketplaces—I would 100% choose the one that let me really own my purchase via NFT, instead of one that requires me to just trust them to keep it for me.
Trust powers commerce, and I really believe NFT marketplaces implemented properly will drive more people to buy with confidence.
losing access to whatever ‘wallet’ the NFT is associated with
The process would be the same as if I lost my Physical diploma. Call the university and they have to mint an identical one for me, at a cost to me.
What might happen instead is that a new company starts up called “stream2” which allows you to play movies you’ve bought in the blockchain
Why would the relevant companies, i.e. movie studios, do that? They could do that now if they wanted to.
But this is precisely what we had before the internet. We used to have physical media that (theoretically) could be copied to multiple devices. You weren’t legally allowed to, but the technology left you in control. I know gamers as a group want this control back after getting shafted by video game companies.
But you seem to be claiming that the possibility of future parties ‘honoring’ NFTs, and NFTs issued by other parties, is exciting. I still don’t understand why that’s plausible. If anything, the visibility/legibility of NFTs makes me think this is MUCH less likely.
The blockchain contains information about who minted it.
The blockchain can’t itself verify to anyone that the information it contains is true or accurate.
So a hiring company—say, Google—would know which wallet MIT used for minting their diplomas.
I can imagine that Google would have alternate channels by which they could verify that a certain wallet is (or was) used by MIT for “minting their diplomas”, but that has to be outside the blockchain (and thus subject to all of the standard security ‘hacks’).
Definitely it seems like a paywall because it is a paywall. Just a more balanced one. As it is, any time you join any kind of DRM or paywall scheme, you’re completely at the mercy of the content host, who can remove your rights to all the stuff you “bought” at any time.
But you seem to be assuming that companies/organizations will voluntarily ‘honor’ past purchases when that seems to be extremely unlikely to me. Why would future content hosts pay to provide access to something (e.g. bandwidth, hosting) that people purchased from someone else? I can imagine someone doing that as some kind of ‘limited promotion’ but I don’t understand why everyone would do that (e.g. by default).
The process would be the same as if I lost my Physical diploma. Call the university and they have to mint an identical one for me, at a cost to me.
I was thinking primarily about the ‘other side’, e.g. the university losing access to their wallet (or access to it otherwise being compromised, e.g. fraudulent diplomas being “minted”).
I think there’s a distinction to be drawn here between:
NFTs as an concept. The possibility that something like NFTs ends up existing and being a substantial market segment.
NFTs that currently exist. The possibility that current NFTs will be worth a lot of money in the future.
Even if NFTs succeed in sense #1 (with NFTs providing some form of decentralized ownership for large markets and lots of value being embedded in NFTs), that doesn’t necessarily imply that they will succeed in sense #2 (with currently-existing NFTs becoming worth a lot and people who hold them making a lot of money).
This is my thought exactly. The digital Art NFTs that are selling now or a distraction.
NFTs are a decentralized receipt system which is totally awesome and which you cannot get rich off by collecting receipts.
I think maybe I’m a little less confused now?
I’m still confused about why that is “totally awesome”.
So there are lots of situations where receipts are pretty important, but increasingly there is a push to have them be digitized, either because it’s just more efficient or the asset itself is digital. For example, suppose you buy a movie through your smart TV.
The problem is these digital receipts tend to either be just downloadable PDFs—easily forged and effectively meaningless—or they’re central databases, which are under the control of the party that owns the database. They can be revoked, lost, made obsolete, etc. Suppose the company that holds my downloaded movie purchase goes bankrupt. Now if I torrent that movie I’m not really breaking the law, or am I? How would I prove that?
A decentralized blockchain system would solve those problems and could be used for proving all kinds of things. “Send us a copy of your diploma”—“here, it’s an NFT”, “send us your invoice to prove you are in warranty”, “here’s the NFT”, “Can you sell me your old copy of Civilization 4?” “Yes, I’ll transfer the NFT to you for $40″.
The potential to store trusted receipts has so many useful applications, we’re just not quite there yet in terms of building it.
I’m confused as to how NFTs ‘really’ solve any of the problems you mention (or similar ones I can imagine).
My understanding is that ‘blockchains’ are, today, pretty centralized, especially effectively (i.e. in practical ways that matter). Any particular ‘blockchain’ also seems possibly ‘lost’ (e.g. abandoned), ‘made obsolete’, etc.. Isn’t there any inherent and inevitable ‘social expense’ that has to be continually made anyways?
I don’t think any current ‘movie purchases’ work like what you describe. It certainly seems like it matters as to whether any ‘movie company’ would be willing to offer movies for sales on the terms you seem to be implicitly assuming, e.g. be able to download a movie an unlimited number of times. Does – today – reasonable evidence of having purchased a movie, e.g. as a DVD or Blu-ray disc, serve as protection or a legal defense to later downloading it thru some other means? I don’t think it does. I’m very skeptical that the companies that sell products like this would willingly offer terms like what you seem to have in mind, e.g. ‘Pay us and then just torrent the movie whenever you want!’.
This is the most interesting example, but I’m skeptical that even it would work that great. (I do admit I’m ignorant of even the gross technical details about how the example would work ’mechanically.)
Is this resilient in the face of, e.g. losing access to whatever ‘wallet’ the NFT is associated with (on either ‘side’)? How would the person or organization requesting someone’s diploma verify that the NFT was issued by the relevant college/university?
Surely some kind of centralized database is still required, right? Wouldn’t the entity requesting the invoice need to have some kind of ‘whitelist’ of entities that are approved to issue these NFTs?
I’m not sure that this meaningfully improves anything. Without some kind of ‘DRM’ (which mostly doesn’t, and probably can’t work generally anyways), this just seems like a more convoluted way to ‘paywall’ a download endpoint.
Not really. The blockchains themselves are decentralized, but the applications built on top of them are centralized. To my buying a movie example, suppose I have an app on my SmartTV called “stream1” that lets me buy movies and register them via NFT (cool). I would prefer that to buying them from say Amazon Prime which did not have NFTs, even if it cost an extra dollar or two. 5 years later, stream1 shuts down. I’m not saying I would actually go torrent the movie. What might happen instead is that a new company starts up called “stream2″ which allows you to play movies you’ve bought in the blockchain, as well as buy new movies. Or maybe Amazon prime has added the feature by then and I can connect my licenses to their service. This is equivalent to a new company coming out that sell Blu-ray players. You already own the Blu-rays, they’re offering you a way to play them.
But this is precisely what we had before the internet. We used to have physical media that (theoretically) could be copied to multiple devices. You weren’t legally allowed to, but the technology left you in control. I know gamers as a group want this control back after getting shafted by video game companies.
No not at all. The blockchain can do this. The blockchain contains information about who minted it. So a hiring company—say, Google—would know which wallet MIT used for minting their diplomas. If it came from that wallet, then it’s legit. In the long run, applications could create a more user-friendly layer. So you paste in the relevant info to your job application, and Google’s HR database automatically verifies it on the blockchain.
Definitely it seems like a paywall because it is a paywall. Just a more balanced one. As it is, any time you join any kind of DRM or paywall scheme, you’re completely at the mercy of the content host, who can remove your rights to all the stuff you “bought” at any time.
I think this is where there’s been a beanie-baby craze with this stuff on the supply side—where some parties are eager to just sell more because there’s a new channel. When in fact, what we have is a better channel, and we need to move old sales onto the new channel.
Sure, existing markets won’t like it—because they lose control. But it’s comparable to how Netflix disrupted Cable TV. People liked the way Netflix served the content better, and cut their cables. Then they became too big to ignore, and all the major content owners got on board. I could see this happening with NFTs too. If I went to buy some digital content and there were two competing marketplaces—I would 100% choose the one that let me really own my purchase via NFT, instead of one that requires me to just trust them to keep it for me.
Trust powers commerce, and I really believe NFT marketplaces implemented properly will drive more people to buy with confidence.
The process would be the same as if I lost my Physical diploma. Call the university and they have to mint an identical one for me, at a cost to me.
Why would the relevant companies, i.e. movie studios, do that? They could do that now if they wanted to.
But you seem to be claiming that the possibility of future parties ‘honoring’ NFTs, and NFTs issued by other parties, is exciting. I still don’t understand why that’s plausible. If anything, the visibility/legibility of NFTs makes me think this is MUCH less likely.
The blockchain can’t itself verify to anyone that the information it contains is true or accurate.
I can imagine that Google would have alternate channels by which they could verify that a certain wallet is (or was) used by MIT for “minting their diplomas”, but that has to be outside the blockchain (and thus subject to all of the standard security ‘hacks’).
But you seem to be assuming that companies/organizations will voluntarily ‘honor’ past purchases when that seems to be extremely unlikely to me. Why would future content hosts pay to provide access to something (e.g. bandwidth, hosting) that people purchased from someone else? I can imagine someone doing that as some kind of ‘limited promotion’ but I don’t understand why everyone would do that (e.g. by default).
I was thinking primarily about the ‘other side’, e.g. the university losing access to their wallet (or access to it otherwise being compromised, e.g. fraudulent diplomas being “minted”).