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by koonsolo
1655 days ago
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The difference is that you can pick the exchange where you trade your token. Because the ownership of the token is really yours. If the central party charges 1% transaction fee, it's a 1% transaction fee. If they only open on weekdays, you can't trade in the weekend, etc. When it's your token, you can trade it wherever you want. |
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- first, the token has to be usable by any exchange it's traded on. Different blockchain technologies may not be compatible. (For instance, you can't move an NBA Top Shot NFT from Flow to Ethereum.) This is a solvable problem from a technical standpoint, but given how fiercely ideological different blockchains are, there may be non-technical stumbling blocks that arise here.
- second, there has to be an "off-the-blockchain" legal connection between the token and the object the token represents, something that's recognized legally as a "bill of sale." This isn't a huge hurdle and I'd assume the purchase of the token includes language that covers this, but that legal language might include arbitrary limitations, such as stipulating that if you don't use their preferred exchange they'll charge you extra fees, or even restricting the token to specific exchanges entirely.
This is an issue that I think a lot of "smart contract" proponents just haven't come to grips with yet: when you read "contract" in terms of a blockchain, think "API contract" rather than "legal contract". A cursory search suggests there are Flow to Ethereum NFT converters out there, but if you run your NBA Top Shot NFT through one, does the NBA still consider it valid?
- third, this example is specifically tying the token to a physical object, which adds other complications. You may be able to successfully trade your token on Sunday, but the wine store may still only be open on weekdays.