NFTs are technically good, with strong fundamentals, and real world applications, the same way ICOs were. But the way they are used has been absolute shit, and nothing sort of utterly useless.
I lean in the same direction, I thought ICOs were a very cool way to replace kickstarter: raising funds, staking ownership, if some enterprise was successful you could even sell your share at market value, or cash out early if you're starting to doubt the campaign's ability to ship the product (if you can find someone willing to take the risk at a lower price)
Unfortunately even more than that they lend themselves to raising funds for vaporware, and I don't think there was a single ICO that actually resulted in a real-world product.
NFTs are essentially a reboot of ICO, except instead of a million tokens each representing a small percentage of ownership, you sell a single token representing 100% ownership. I think they could still be used to fund artists (I think of them more as patronage than trading cards), but very few artists are actually raising funds this way, the market is almost entirely trash being wash traded and plots of land in metaverses that don't exist yet.
I think they will suffer the same fate I see in crypto over and over again, any legitimate use case is totally overwhelmed by the number of scams, makes the whole thing wholly unattractive to participate in.
There are literally thousands of dApps developed and governed by DAOs funded by ICOs which tens of millions of daily active users derive economic value from. Sure, lots of ICOs find vaporware. But so do the overwhelming majority of VC investments.
Sorry, by "real world product" I was thinking the kind of thing that gets funded on Kickstarter, e.g. hardware or at least some kind of entertainment production.
I'm aware there's thousands of dApps and DAOs but I don't know what any of them actually do besides pay early participants with funds derived from later participants.
> NFTs are technically good, with strong fundamentals, and real world applications, the same way ICOs were. But the way they are used has been absolute shit, and nothing sort of utterly useless.
I keep thinking that all the use-cases for NFT's can be replaced with current digital certificate signing. Transferring something only needs signing with the private key, right?
What are the real-world use-cases for NFT that simple and existing PGP signing won't work for?
NFTs are smart contracts and as such come with automatically enforced terms. You can create a token which expires, useful for licensing. You can create a token which pays royalties to an artist with every sale. You can create smart financial instruments which are technically NFTs and which skip the regulation put on the financial industry to perform more risky investments, and even automate functions like profit sharing or paying off a bond. You can even develop various semi-fungible tokens that do all these things!
You can't do that with PGP. You'd need to run a bank to get most of that and some of that is illegal on a global level so even as a bank you'd have to dip outside the law. These are the real uses of NFTs, not artificial scarcity magic internet tokens associated with procedurally generated soulless art from templates made in paint over 5 minutes.
> You can create a token which expires, useful for licensing.
Can you end the license before expiry? Because if you cannot, then it isn't useful. License holders like to know that they can revoke the license if terms are not met.
> You can create a token which pays royalties to an artist with every sale.
Can you end the royalties? Who gets the royalty when a dispute arises is frequently decided by the courts.
> You can create smart financial instruments which are technically NFTs and which skip the regulation put on the financial industry to perform more risky investments, and even automate functions like profit sharing or paying off a bond.
So, enable one to skip the laws? That doesn't sound very much like something society wants.
> You'd need to run a bank to get most of that and some of that is illegal on a global level so even as a bank you'd have to dip outside the law.
Using a tool or instrument to do something illegal doesn't make it okay to do that thing.
Of course you can, you just need to specify terms. Terms that can be in some reliable way observed by the blockchain, of course, so you'd need a trustworthy oracle or whatever to actually observe activities outside the state.
> Can you end the royalties? Who gets the royalty when a dispute arises is frequently decided by the courts.
If that's part of the contract, then yes. A smart contract is not necessarily a legally binding contract, it's a computer program which can be or represent some actual legal instrument. Once a contract is written, it cannot be revoked, unless it itself contains code that allows for one or both parties to make it not function. At the moment it is created, it becomes just an entity on the blockchain, linked to the parties by nothing but the fact that under certain conditions it will perform certain actions, which can relate to certain accounts.
> So, enable one to skip the laws?
Yes, this is a fundamental belief that can't really be separated from blockchain technology. All data and all things of value are equal before the law and you can sell illegal bonds as easily as a kid can sell him ms paint art. For several reasons, you can imagine the most reprehensible type of data or instrument one could sell online, and blockchain tech would declare that it deserves to be traded on a public market like any other commodity.
> Using a tool or instrument to do something illegal doesn't make it okay to do that thing.
Something being illegal doesn't mean it's not okay to do. Using a method which makes a law impossible to actually enforce makes that thing effectively not a law, and to do or enable that is to declare to the world that this thing should not be illegal. Fundamental, again, I cannot see a way of separating this from blockchains with arbitrary smart contracts.
“Smart contracts” are also automatically enforced bug bounties, as anyone familiar with their sordid history knows. With “smart contracts”, you could argue that exploiting a “bug” in them is just part of the contract.
Actual contracts have some very good properties: they must be legal, and they are open to (some) interpretation in case they aren’t perfectly written. And we have a process for resolving disputes that doesn’t involve forking the entire blockchain.
Like any fintech thing to be honest. In this case it just happens to be quite legal as well as the law extends its grasp into the crypto space quite slowly.
You don’t even need that level of technology. If I bought an NFT of someone’s cat all they’d need to do is tweet that I did so, from their blue ticked alt.
NFTs don’t have to be digital assets. They can represent ownership or a share of ownership of something unique, like a piece of real estate. All depends on what can be legally recognized as part of the contract.
I'll grant you that but we already have something that represents ownership in the real world - contracts. I'm not clear what advantages NFTs bring to the table for non-digital assets.
Unfortunately even more than that they lend themselves to raising funds for vaporware, and I don't think there was a single ICO that actually resulted in a real-world product.
NFTs are essentially a reboot of ICO, except instead of a million tokens each representing a small percentage of ownership, you sell a single token representing 100% ownership. I think they could still be used to fund artists (I think of them more as patronage than trading cards), but very few artists are actually raising funds this way, the market is almost entirely trash being wash traded and plots of land in metaverses that don't exist yet.
I think they will suffer the same fate I see in crypto over and over again, any legitimate use case is totally overwhelmed by the number of scams, makes the whole thing wholly unattractive to participate in.