[machinelabo]

NFT's are a weird thing, it is half scammy (practicality) and half useful (ownership, non-fungibility of the token itself). I am reading up on the NFT standards (ERC721 is the simplest one) [1] and this is the core contract API:

  contract ERC721 {
   // ERC20 compatible functions
   function name() constant returns (string name);
   function symbol() constant returns (string symbol);
   function totalSupply() constant returns (uint256 totalSupply);
   function balanceOf(address _owner) constant returns (uint balance);
   // Functions that define ownership
   function ownerOf(uint256 _tokenId) constant returns (address owner);
   function approve(address _to, uint256 _tokenId);
   function takeOwnership(uint256 _tokenId);
   function transfer(address _to, uint256 _tokenId);
   function tokenOfOwnerByIndex(address _owner, uint256 _index) constant returns (uint tokenId);
   // Token metadata
   function tokenMetadata(uint256 _tokenId) constant returns (string infoUrl);
   // Events
   event Transfer(address indexed _from, address indexed _to, uint256 _tokenId);
   event Approval(address indexed _owner, address indexed _approved, uint256 _tokenId);
  }

It's not hard to understand. This ERC721 NFT token can verify is its owner (ownerOf()), and the actual item of interest (tokenMetaData()). Item of interest is secured either on the blockchain itself or offline using URL reference in the metadata.

All good. But that's all she wrote. Banksy can list his digital artwork on the internet and many people can bid on it. That is actually valuable if you think about it in isolation. The problem is on the auction side, with decentralized bidding - you have no idea if this artwork was pumped up by fake buyers. There is no Sotheby's or Christie's auction house to mediate this.

URL metadata is also weird - now you're passing on the value of the token to whoever owns the Domain Name and the servers responding to the GET request. If the artist decides to sell or forgets to renew the domain name, your NFT is useless unless the data was backed up somewhere. Even then, the next buyer of the NFT would want to access the URL and get their goodies instead of getting it from anywhere else since that's not on the tokenMetadata.

[1] Source: https://medium.com/crypto-currently/the-anatomy-of-erc721-e9...

[capiki]

Isn’t the problem also on the seller side, where anyone can claim that they’re Bansky and then a trusted central 3rd party has to verify if they actually are?

[machinelabo]

Yes, but if Banksy himself advertises the auction and provides the proof that the NFT is issue by him, then there is no confusion. Imagine if Banksy interviews with CNN and advertises his auction. Or Youtube or in person in an event.

Beeple did just that.

But, I get what you're saying. There is a verification process to traditional art as well. You cannot simply impersonate Banksy and call Sotheby's, they need to verify you are actually Banksy.