[je_bailey]

Friend of mine wanted to know what a NFT is and I wrote down a URL and gave it to him on a piece of paper. That's an NFT. You can sell that paper, use it if you want but what ever is at the other end of the URL isn't yours and you can't guarantee it will be there or be consistent between the times you go. But by god you have a piece of paper.

[hcks]

This isn't what an NFT is. To be complete, at least, there should also be a distributed and secure worldwide ledger to which anybody can access that says that you gave this exact piece of paper to your friend on that date.

[boopboopbadoop]

You’re right. The example should have both OP’s friend and OP with a similarly useless piece of paper.

[yayr]

that. Plus you can add a secret to the paper that allows unlocking the content at the URL, which normal users would not have. That secret can only be decrypted by the owner of the paper.

[smt88]

> Plus you can add a secret to the paper that allows unlocking the content at the URL, which normal users would not have. That secret can only be decrypted by the owner of the paper.

You cannot do this with an NFT unless the server that the NFT is hosted on supports it (and has awareness of the blockchain). Then it becomes centralized to that server. You couldn't do it with IPFS.

[yayr]

you're right. Thanks for pointing that out. The encryption of the secret has to happen of chain, so that the secret is still secure. So typically that would be done by the provider of the NFT and thus is not decentralised. Essentially, this would eliminate the need to put the secret on the chain at all. Only the proof of ownership would be on chain.

[capableweb]

You're doing everyone, including us who are against NFTs in general, a huge disservice by explaining it that way, as that's not what NFTs are...

Edit: I should have added my own explanation as it's not as obvious to everyone else what an NFT is. If we continue the analogy with paper, then a NFT is a piece of paper with a unique identifier that cannot be copied. If you have that piece of paper you know that A) No one can have the same piece of paper without having that actual paper and B) no one can fool someone else they have that same paper (based on the ID). NFTs have nothing to do with URLs (although some NFTs do have URLs inside of them), the main point is to have something with a unique ID that is unique within that specific blockchain.

[ceejayoz]

It's a little ironic to complain about a bad explanation without giving an explanation as to why it is one.

(To be fair, a better analogy would involve OP setting fire to a rainforest somewhere as part of the process.)

[capableweb]

Yes, I agree. Added a more truthful explanation to what an NFT actually is.

[felixgallo]

Your explanation is nonsensical.

> If we continue the analogy with paper, then a NFT is a piece of paper with a unique identifier that cannot be copied. If you have that piece of paper you know that A) No one can have the same piece of paper without having that actual paper and B) no one can fool someone else they have that same paper (based on the ID).

This is where the entire argument falls apart trivially. The problem is that NFTs are just random pieces of paper containing a pointer. They're not guaranteed to be the only pointer, the content on them can be copied, they're not actually scarce resources, and everyone can (and does) fool everyone else about whether or not they have the same paper and/or the same pointer.

Additionally with NFTs, the pointer is often to some random centralized resource holder/single server in the 'centralized fiat' world of trust, and quite frequently that turns out to be a $5 VPS running apache that someone stops paying the bill for.

[jollybean]

You're missing the forest through the trees.

The technical mechanism of 'Blockchain' might be a novel artifact of the definition of an NFT - but it does not matter.

You're talking about the 'type of paper the deed to the house was written on'.

We don't care about the 'technology used to make the deed' - we care about the implications, i.e. ownership of what, how, when etc..

An NFT is indirectly implied to be 'ownership' of something, but in reality, it's simply 'ownership of the NFT' itself really.

Any legal or popular control over the 'digital content' has nothing to do with NFTs, it's just 'by implication' and has no real social or legal basis.

As such, the 'piece of paper' is a decent analogy.

"It's a record, that references something; you own the record itself, but it means absolutely nothing beyond that".

If you want to think you're cool from owning that, that's cool, or not, or whatever.

It's a good analogy.

[Izkata]

> No one can have the same piece of paper without having that actual paper

You seem to have missed what the analogy is: The piece of paper is the blockchain record, the thing that can be exchanged with other people, not the art or whatever at the end of it (hence why a URL on the paper was mentioned).

It's a great explanation for non-technical people.

[capableweb]

Misleading explanations are never great. Sure, abstract it a bit to make it easier to understand, yes that makes it great for non-technical people. But misleading them to "prove" your point? Never great.

Anyone with a basic understanding of NFTs will immediately see that you don't understand what you're talking about if you use that explanation, as NFTs have nothing to do with URLs, art or whatever. It's simply a currency with the total supply being 1. Nothing less, nothing more.

Confusing that with the whole "NFT Art" space is just doing everyone a disservice, as there are people who actually understand NFTs, and are against them, but based on their actual capabilities, not some fake thing you've made it.

[dark-star]

> It's simply a currency with the total supply being 1. Nothing less, nothing more.

Yes, exactly like that unique scrap of paper, of which there is only 1 in existence. The fact that OP wrote an URL on it is not important, it could have been a sticker, or a coffee mug stain, or even nothing at all. The scrap of paper is guaranteed to be unique since you can never rip out the same piece of paper again, the fringes would be all different

I find it a good analogy

[mds101]

From what little I know of NFTs, that piece of paper is most definitely an NFT. Curious as to why you think it's not. Could you explain?

[988747]

To be more precise, NFT is a blockchain record confirming that you own that piece of paper :)

There was a scam scheme on eBay that if you did not read the item description correctly you would be surprised to discover that you paid $2000 for a picture of the laptop, instead of the laptop itself. NFTs are similar, except the element of surprise is missing. People still buy them, because the word "blockchain" causes their brains to shut down.

[polishdude20]

How does the original owner confirm they own the thing before it gets logged in the blockchain though? I think that's the hard part. The conversion of ownership record from real life to blockchain.

[matkoniecz]

They don't. That is just one of problems of NFTs.

(if they do - they do it outside blockchain, what makes blockchain part quite pointless, beyond Ponzi part)

[superbaconman]

All encryption schemes have this problem. You never really know who you're communicating with unless you trade keys irl.

[distances]

That is not relevant. NFTs do not include ownership of anything else than the record in the ledger. You don't have any intrinsic copyright or other kind of ownership to the token, or to any linked monkey jpegs, by just having the NFT.

[falcolas]

Just a guess, but its missing the verifiable signature.

Notarize it, and the analogy is back on track.

[capableweb]

Main falsehood from je_bailey's comment is that NFTs have nothing to do with URLs, and secondly the entire thing is based around uniqueness within blockchains, so important to highlight when you try to explain what NFTs are.

[dpark]

> NFTs have nothing to do with URLs

This is untrue in practice. In theory an NFT could have no url associated with it. In reality that’s how NFTs were envisioned and how they are actually implemented.

> the entire thing is based around uniqueness within blockchains, so important to highlight when you try to explain what NFTs are.

That’s right. You have to mention the blockchain so that people turn off their critical thinking. Because if you describe an NFT without techy-sounding buzzwords, people will rightly say “that sounds stupid”.

[teekert]

Because the blockchain is distributed? So It’s more like you are giving your piece of paper to many people around the world who keep it safe for you but can’t change its contents.

[ceejayoz]

Great. Now what?

The person who owns the URL on the paper can change the contents of that URL. Legally, the paper may be a gift, but I'm now the proud owner of a piece of paper.

I can similarly own a map to the Mona Lisa. Everyone in the world may even agree and attest to that fact! I don't own the Mona Lisa as a result. The Louvre can move it, take it off display, burn down, or do any number of other things.

[teekert]

I agree with you.

[capableweb]

Nothing of what you're writing has anything to do with NFTs, did you perhaps write in the wrong thread?

[ceejayoz]

I'm very much in the correct thread.

NFTs have already gone dark in this fashion. https://twitter.com/CheckMyNFT/status/1369802069729812483

Hell, Jack "sold" his first Tweet for nearly $3M as an NFT. You don't own it. You can't delete it, you can't do anything with it. Jack could delete it! Twitter could delete it! Twitter could make that URL host a page that says "NFTs are dumb". You own the NFT itself.

https://www.cnbc.com/2021/03/22/jack-dorsey-sells-his-first-...

> According to “Valuables,” the tweet itself will “continue to live on Twitter,” but the winning bidder would own the NFT, “signed and verified by the creator,” like a virtual autograph.

[muthdra]

The "map to the Mona Lisa" is a perfect analogy. And the best part is that we can even create a new blockchain, call it something like "Besthereum" with another map to the exact same work in the real world. You don't even really own the map but a specific representation of the map, unique to the blockchain it's contained in.

[Tenoke]

For a start, I can't myself confirm the existence of this 'NFT' and its record of changing hands or originator the way I can with all actual NFTs.

[ceejayoz]

You can't do that with NFTs either.

https://opensea.io/assets/0xbc4ca0eda7647a8ab7c2061c2e118a18...

https://nftrade.com/assets/eth/0x176e0fe17314def59f0f06e976e...

Imagine you have zero off-chain knowledge. Which one of these is the real one?

[Tenoke]

On-chain knowledge is the transaction https://etherscan.io/tx/0x798c7060f2e5e0cf2a4d143874be88f404... and their official address 0xbc4ca0eda7647a8ab7c2061c2e118a18a936f13d which is sufficient for me to tell whether it was minted by them or not. The other one clearly is affiliated with some other address in its transaction.

[ceejayoz]

No, that's off-chain knowledge coming into play.

You know Bored Ape Yacht Club and Phunky Ape Yacht Club exist. How do you know which one owns the copyright to the images? Which one's the original artist, and which one's the fraud?

[Frummy]

It's existence and ownership is not verifiable on a cryptographically secure distributed computer (blockchain)

[ceejayoz]

Existence, perhaps.

Ownership, no. That's a legal concept.

https://www.theverge.com/2021/12/30/22860010/bored-ape-yacht...

> A pair of non-fungible token projects are testing the boundary between plagiarism and parody. Digital marketplace OpenSea has banned the PHAYC and Phunky Ape Yacht Club (or PAYC) collections, both of which are based on the same gimmick: selling NFTs with mirrored but otherwise identical versions of high-priced Bored Ape Yacht Club avatars. Now the dueling projects are selling their apes while dodging bans from other marketplaces, becoming the latest example of how the NFT world handles copied art.

The only thing that determines the real Bored Ape Yacht Club is an off-chain belief that it's the legitimate one.

Hell, they can't even agree on which one is the real fake.

> Somewhat ironically, PAYC and PHAYC have since fought on Twitter over which one is the authentic Bored Ape Yacht Club ripoff, with PAYC’s founder referring to PHAYC as a “cash grab fraud project.” PHAYC charged people to mint its apes, and CoinDesk reports that it took in around 500 ETH (or around $1.8 million) in sales. By contrast, it says PAYC earned around 60 ETH (or roughly $225,000) from its paid sales.

[Frummy]

That's an interesting example, but I consider it semantic only. Your example raises the question of authenticity rather than ownership. It it clear as day which wallet the NFT is connected to. The original NFT and the imitating NFT has different places in the blockchain memory. Regarding authenticity, timestamps are visible since the whole blockchain can be audited and see who got there first on all sorts of metrics

[ceejayoz]

Copyright is a matter of “who created it”, not “who slapped it on a blockchain first”. If I send you my new artwork and you put it up on OpenSea before I do, you still aren’t the owner, regardless of the timestamp.

[gspr]

Are you hinting at the fact that we're missing a giant ledger in which the paper is documented as being Really Really The Really Most Real And Authentic Paper? Since that ledger isn't rooted in anything else than a bunch of people's feelings about it, I think it's fine to leave it out of the analogy.

So yeah, NFTs are like the parent comment explains. Plus that ledger that has no actual meaning.

Edit: I'm not underestimating that giant ledger's technical solution for verifying the piece of paper. All I'm saying is that it doesn't fucking matter.

[capableweb]

Apparently it matters enough for you to voice your concerns against it? And no, NFTs are not required to have any URLs in them, that's a separate concern, and parents whole argument is NFT === piece of paper with a URL, so how is that accurate?

But again, "it doesn't fucking matter" so no need to reply me, in fact, if you don't care you probably shouldn't, because replying would signal you do actually care.

[tonguez]

I think he’s saying that NFTs don’t matter, not that you don’t matter. You don’t need to get upset.

[pintxo]

funny enough, you just described paper money.

a) they have a serial number making each unique b) they are purposefully designed to make it easy to identify forgeries

[aqme28]

I think this is a good example of an NFT.

To the detractors: can you explain what an NFT is without saying blockchain or distributed ledger? An NFT doesn't need those to be an NFT.

[chillacy]

I would add the analogy a bit more:

1. The paper has an authenticated watermark which cannot he forged by any known technology

2. The paper can teleport a shadow copy of itself anywhere in the world: it can be inspected by practically anyone in the world, without the shadow copy being traded as the real thing

[falcolas]

And if you get it notarized, its an even better analogy.

You know, like titles.

[nradov]

Legally speaking, notarization doesn't count for much or provide any ironclad guarantees. For real estate titles what counts is the centralized county registry.

[apocolyps6]

What ironclad guarantees does the NFT provide?

[nradov]

None

[shantnutiwari]

thats a great analogy! I now know what to say if someone asks me the same question

[NoahRoseWood]

It's not true. Some NFTs work that way, but not all

[capableweb]

It's a great way to highlight that you don't actually understand NFTs. If you're actually against NFTs (like many of us), then please don't use that explanation, it'll make it look like you don't actually understand NFTs.

[nik_s]

I'm not sure I agree with your explanation.

Most NFTs are like a title to a house. Like a title to a house, you can: 1. Prove you own it; 2. Sell it to someone.

Unlike the title to a house: 1. The party certifying your ownership is not the government, but the consensus rules of a blockchain; 2. The thing you own is not physical, but digital in nature; 3. Your ownership does not prevent anyone from copying the file itself for their own uses.

Regarding your point that the object you own might not be consistent: because of the cost relative of storing data on a blockchain, the actual digital thing you own isn't usually stored on the blockchain, but a hash of that file (e.g. [1]). Unless hashing is broken, this is cryptographic proof that the object does remain consistent.

[1] https://github.com/larvalabs/cryptopunks/blob/master/contrac...

Edit: perhaps the notion of an entry ticket to a concert would have been a better analogy than a title to a house.

[jhugg]

Ah but the government will enforce my claim on the house if I’m holding (rightfully) the title. And if someone steals the title, it doesn’t mean they own my house.

[nik_s]

You can also say that blockchains have mechanisms that prevent a government from coercing third parties from handing over your NFTs to someone else.

I'll agree that the analogy wasn't perfect though - I added an edit for another analogy (still as imperfect as it may be).

[jhugg]

The government can still use the JPEG though.

[lolinder]

If I own the title to a house, I can, among other things:

* Live there

* Remodel it

* Landscape it

* Rent it out

* Etc.

What, beyond selling it, can I do with my new NFT? What does it even mean to own it, if my right to copy is no greater or less than anyone else's?

[capableweb]

You can prove that you own it (the NFT, not something else), which could be used for authentication systems. You could rent/lend it out, could also be used for subscriptions or whatever. Or you could sell it.

Basically, imagine a certificate you have on your computer, except it's publicly known, then imagine use cases based on that.

[ceejayoz]

> Basically, imagine a certificate you have on your computer, except it's publicly known, then imagine use cases based on that.

We have that?

https://pgp.mit.edu/

https://github.com/ceejayoz.keys

[lolinder]

Yeah, there's another top level thread that helped me understand that a bit better: not all NFTs are art NFTs.

Which is to say that I think the problem is less that NFTs are inherently worthless and more that the crypto community desperately needs to reclaim the brand from the speculators, if there's even anyone else left.

For all the cool applications that there might be for blockchain, the only ones that seem to gain traction are the ones that involve highly speculative investment machines. NFTs have been no different, and it's this tendency that makes many people very uncomfortable with anything involving crypto.

[dpark]

You have to realize that this is not a defense in NFTs as they are being discussed.

The discussion is art NFTs being worthless (or not). Coming in and saying “yeah, but not all NFTs are about art” it’s not helpful. If you think that art NFTs are stupid but the underlying tech has promise, then say that. Don’t defend “NFTs” because that looks like you’re defending the value of the current ones actually being discussed.

Engaging in a semantic argument just muddies the whole issue and looks like you’re defending something you are not.

[slightwinder]

What can you do with a bank account, a book you wrote, a patent you own, an image you shot? Immaterial objects and intellectual property is not new. And NFTs are not that innovative or special in that regard.

[ARandumGuy]

All of those examples are backed by the state, who has the authority and power to investigate, litigate, fine, and arrest those who violate their rules. NFTs don't provide that. There's just the promise that, eventually, people will respect other people's NFT ownership... for some reason.

[slightwinder]

And why should the same not apply to NFT? They are not exempted from the laws, aren't they?

[apocolyps6]

The laws of the country you live in have answers to those questions. Usually, you are the only person legally allowed to use your bank account. Nobody else is legally allowed to publish your book under their name, etc. There are no laws protecting "ownership" of NFTs

[jollybean]

"are like a title to a house"

They are the opposite of a title to a house.

The most important function of the 'Title To the House' is that you own the house.

That's the whole point of the title.

An NFT is a homeless person selling you a 'certificate' that gives you 'ownership' of the 'Brooklyn Bridge'.

[me_me_me]

> Most NFTs are like a title to a house

NFTs are like a title to a house that you wrote with a crayon.

There is no legal grounds for ownership, its just bunch of people claiming they own something and some other saying they agree.

You can convince whole china + india that you are king of england, but goodluck with actually sitting on the english throne.

[lmilcin]

Not even that.

A house drawn with a crayon can be considered an artwork or may have sentimental value.

You also have clear ownership of that artwork that you can defend in court.

You will also not loose "ownership" the moment the business that certifies it goes out of business or looses their database to ransomware.

[geerlingguy]

Ooh, we could take a picture of that, host it on Imgur, and sell the link as an NFT!

[riquito]

"Most NFTs are like a title to a house, except you can copy the house". I'm not sure that example would clear things out

[robbrown451]

Whether title to a house, or entry ticket to a concert, those give you a practical, real world ability to do something. You can live in the house (or allow someone else to and charge them rent), and the government will defend this right for you. You can do neither things if you don't own the house. (well maybe you can live in it if you pay rent to someone who does) You can attend the concert if you have a ticket.

If you own an NFT, you get no practical real world benefits.

[garyrob]

You're taking a lot of flak here, but I think you're basically correct. (Even if cross-game NFTs never become a thing.)

The debate reminds me of when Napster looked, to many, like it would end the sales of pre-recorded music, since music can be copied identically for free. Obviously such predictions turned out to be wrong.

I think they would have turned out to be right if there was no such thing as copyright law. But there is. People were prosecuted, and over time the prosecutions made a difference. They helped it make sense to invest money in creating well-designed, easy-to-use streaming services. And in the end, for most people, it was more convenient and risk-free to get music from such services than to pirate it. It was worth the cost.

Over time, if people spend real money on NFTs, the legal system will evolve to better protect people's purchases. For now, if two people claim to be the creator of a given artwork which is the subject of an NFT, and create two NFTs, only one of them will have the actual copyright. That should provide a basis for legal action.

As I said, I'm not sure cross-game NFTs will ever get past the hype stage. But I have been to a museum where truly beautiful NFT art was on display. I haven't bought any art in many years but I can certainly imagine that my next art purchase could be that kind of NFT. By purchasing it, I am helping the creator in "1000 True Fans"[1] manner, and I am, in the creator's view, which is the only one with any legitimacy when it comes to digital art, the "owner". (Even if I am the second or third purchaser of an NFT, the fact that the original purchaser knew he could sell it to someone like me is part of why he purchased it, so I have helped create the environment where that original purchase could happen.)

While it's true that people can make copies that are identical, people can also make copies of the Mona Lisa that can't be distinguished by anyone but specialists. To the normal person, they would appear to be identical. It isn't what they look like that matters. It's the legitimacy: which is the legitimate Leonardo Da Vinci? It's the one he personally made (and/or was made in his studio by other people under his direction). It has nothing to do with how it looks to the average person.

To one degree or another, these issues of legitimacy and helping the artist will have an affect and give value to NFTs of real art.

I'd also be willing to bet that there will be a long-term market for "collectibles" for the same reason there is for baseball cards. If someone were to make an identical copy of an original Mickey Mantle baseball card, it would have no value. Only the original does, and only because the purchasers believes it is the original, and therefore legitimate, card. The mechanism for NFT legitimacy is different, but there is no reason to assume that that mechanism will not create persistent value over time. It is unclear now how much value it will create. But it would be wrong to just dismiss it at this early stage.

[1] https://kk.org/thetechnium/1000-true-fans/; see also https://future.a16z.com/1000-true-fans-try-100/

[iszomer]

Took me a while to wrap my head around the `baseball card analogy` but I've come to the conclusion that if they can be used to perceptively represent NFT's then pragmatically, the `serial number of the card` (or the object's metadata) is what you own as recorded on the blockchain and not the object itself.

[stiltzkin]

Now your friend is going to spread misinformation.

[rattlesnakedave]

"And then everyone clapped." This is not what an NFT is.

[je_bailey]

Then you don't understand NFTs

[rattlesnakedave]

I really encourage you to read EIP-721 and EIP-1155, then think a bit more creatively about the use-cases of non fungible, transferrable data, the possession of which is easily cryptographically verifiable.

[ceejayoz]

Despite the common saying, possession and ownership often aren't the same thing.

[rattlesnakedave]

What?

[ceejayoz]

You said "non fungible, transferrable data, the possession of which is easily cryptographically verifiable", but NFT advocates talk about ownership a lot.

I can possess all the bored ape JPEGs. So can anyone else in the world who can right-click or screenshot or download a .zip of them.

[koffiezet]

> the possession of which is easily cryptographically verifiable

Too bad for NFTs that "possession" is a legal problem, not a technological-one. If a court and government doesn't recognise that cryptographic verification, you're out of luck.