[ahnick]

NFTs are probably best thought of as ownership records or certificates for items that could be either digital goods or physical goods. If you want NFTs to be useful as an ownership record for a physical good, then there will need to be some authority in the physical world that agrees to use the NFTs on a specific blockchain as the system of record for transactions of that good. (e.g. local municipalities using NFTs on Ethereum to represent property deeds)

Some benefits of NFTs in the property deed example would be:

  - The elimination of the need for municipalities to maintain proprietary databases to hold property deeds
  - 24/7 globally accessible property information. (No downtime)
  - Standardized and globally interoperable property records across municipalities and potentially countries
  - Easy to prove and verify ownership of properties, which could be used to grant access to third party services for homeowners. (e.g. HELOCs)
  - Dapps could allow property owners to post the NFT deed as collateral and automate the loan application process to reduce processing costs.

[Yizahi]

This is impossible. Basically you MUST have a centralised DB at the municipality storing all the data at before (because it is impossible to do so on chain, due to chain tech limitations). Plus you have a useless NFT chain on the side, where NFTs are primitive URLs to the centralised DB (CDB). Even more - they are one way links. So that CDB doesn't know anything about blockchain state and NFTs. Next problem - no person owns NFTs, they are owned by wallets. Therefore these wallet must be deanonimised and registered at the municipality and in the CDB, so that there is at least one place to show who owns a deed.

Now some potential scenarios:

1. A sells deed to B. So now they do in on chain and NFT is sold from wallet X to Y. All of that is registered in the CDB and confirmed with paper documents, contracts and stuff. Maaaybe that can work, but as we see NFTs are useless fifth leg in a horse here.

2. Inheritance. Deed is inherited by law by person C (with or wihtout wallet Z), but chain doesn't know about it and thinks wallet X still owns NFT. CDB has actual data and overrides "wallet X" line, so that chain now useless and outdated.

3. Law enforces deed transfer from A to B. Again, NFT is not sold and chain is not updated.

The list of situations can go on and on.

And last note - these so called "dapps", which are neither smart nor contracts, are the most stupidly delusional thing you can introduce into a valuable commodities market. Only people not familiar with the scale and rate of exploits caused by usage of these dumb and badly designed programs can suggest it. Or the one profiteering from this. Phishing is over the top and even experienced users at r/CC are regularly losing everything due to a single click mistakes. This is not how housing market worked and will work. Not how any market works actually.

[ahnick]

No, it's not impossible. You don't need to store all state on chain. You will just need to store a hash of the off-chain data on chain. The supplemental off-chain data can be stored in standardized storage systems, which they themselves might be highly distributed and standardized. (e.g. IPFS)

[illiarian]

> You don't need to store all state on chain. You will just need to store a hash of the off-chain data on chain. The supplemental off-chain data can be stored in standardized storage systems

It amazes me how people say this with straight face. "Just store all the data off-chain!". Then the chain isn't needed.

[ahnick]

I'm not sure how you made that jump in logic. The chain is absolutely needed as it stores and establishes cryptographic proof of ownership. This is the entire premise behind validity rollups for layer 2 networks.

[illiarian]

> I'm not sure how you made that jump in logic.

What jump? You literally said that all the data is stored somewhere else.

> stores and establishes cryptographic proof of ownership.

It stores some unenforceable token that is only valid as long as those who actually enforce ownership agree that it proves anything.

So:

- all data is stored elsewhere, on centralised servers

- proof of ownership is enforced by centralised entities (governments, courts, police, etc.)

Great application of blockchains.

[ahnick]

> You literally said that all the data is stored somewhere else.

No, I didn't. The NFT would be stored on chain and inside the NFT would be hash of the data that is stored off chain. Anyone can then source the off chain data from any location and then compute the hash of that data and compare it with what is stored on chain.

> It stores some unenforceable token that is only valid as long as those who actually enforce ownership agree that it proves anything.

This is no different than any other system. What makes that Oracle database that your property assessor uses to store your parcel information in enforceable? Oh yeah, the government.

[JohnFen]

> as it stores and establishes cryptographic proof of ownership.

But if the entity that is charged with keeping track of who owns what needs to keep a central database anyway, what value does keeping the ownership records elsewhere bring? I see doing that as accomplishing nothing but increasing the number of things that can go wrong.

When it comes to things like real estate, the "proof of ownership" is completely without meaning unless you also have the extra data beyond that. Things like where the land is, what the boundaries of the property are, etc.

[Yizahi]

The hash literally changes nothing except for maybe verifying integrity of the data, and that is debatable. Add hash in the examples above and literally nothing will change. You can't just throw technojargon term at everything and see where it sticks.

[ahnick]

The hash is critical as it is what enables you to verify that the off-chain data is correct. What exactly did you think was technojargon? I'll be happy to elaborate.

[Yizahi]

That's I wrote. Sure, it enables data integrity (maybe, but let's be charitable). Now what? How does the fact that token knows about external data prevents that data from being manipulated if needed? Or do you propose banning inheritances, lawsuits and other actions which apply to the real world artifacts just because blockchain can't deal with that? :) That won't happen.

[ahnick]

It doesn't prevent the manipulation, but it does assist in detecting it. If someone manipulates the off-chain data, then when that off-chain data is hashed and re-verified against the hash stored in the NFT on-chain then there will be a mismatch in the hash values.

Let's suppose that the off-chain data is a PDF containing all the information for the property deed. If the hash values don't match then it means the PDF should be disregarded. If the off-chain data was kept in multiple locations, then one could potentially still retrieve a good copy of the PDF whose hash matches and then can be trusted.

Now, just because a blockchain can be used as the system of record for property deeds does not mean one wouldn't need to still have laws and other organizations enforcing that system of record. The blockchain is just a tool that makes some aspects of the record keeping easier and opens up some interesting possibilities as I've outlined in other comments of this thread.

[popcalc]

Why not just check the off-chain database and sidestep the hash stuff in the first place?

If the off-chain data is "incorrect", what are you going to do? Can anybody mint those NFTs? What's the point then? The government is the only one who can kick you out of that house irl.

[ahnick]

Since the on-chain hash is part of an immutable object that no one can change, then anyone can use it to verify that the off-chain data is valid at anytime. (No one needs to go ask someone else whether it is valid they can check for themselves) If the off-chain data was found to be invalid, then a correct version of that off-chain data would need to be provided or a process would have to be developed that would handle exceptions where the document is no longer available and now a new NFT would need to be minted.

The minting process could be managed by the government or some entity using an on-chain contract or it could just be a manual process that the government does in conjunction with banks. The enforcement of the ownership records would still be held with the government. The point of having property records as NFT on-chain data is it enables easy to verify ownership of property records, transparency/auditability of property records, and easy transfers of property records to new owners.

[JohnFen]

It's possible to intentionally alter data that a hash has been computed from in such a way that it still computes to the same hash. Hashing alone is a weak way of ensuring that data has not been altered.

[ahnick]

It is extremely hard to break cryptographic hash functions to the point it is considered impossible. If you could do that, then you could be breaking into all sorts of systems. Cryptographic one-way hash functions are actually the preferred way to secure passwords.

[automatic6131]

All of this is literally easier and cheaper to do without NFT woo. The reason why it doesn't already exist is that there's practically no need for it.

>Dapps could allow property owners to post the NFT deed as collateral and automate the loan application process to reduce processing costs. Do you not see how this is a bad idea? What value is the NFT deed? The house has the value - what's the NFT worth? If you have the NFT deed, are you the house owner? Bruh.

[ahnick]

How would you design an HA system that has literally 0 downtime and accessible from anywhere in the world that people can cryptographically prove ownership of a property? How would you prevent DDoS attacks of that system? Further, how would you keep costs low enough that a typical small city or township could afford said HA property system?

What value is the property deed? The house has the value - what's the property deed worth? If you have the property deed, are you the house owner?

[atoav]

> How would you design an HA system that has literally 0 downtime

When you ask a question like that I can't help but asking back: How would you design any system that has "literally 0 downtime" and why do you think it is only possible to achive it using a blockchain?

As for the second part: proving some digital data is originating from someone is what we have been doing using cryptographic signatures for quite a while now. How to do so in a stable fashion that resists changes to the original data e.g. editing, cropping, color-manipulation, pitch shifting, etc is the challenge. This is called fingerprinting.

To proove ownership of a material you just need a list of fingerprints and a reference to the entity that owns the rights. How to do reliable databases is a problem that we sort of know how to deal with in 2023.

The question is, why would you need a blockchain for that problem? The hard part is not trusting the entity that stores the data, the hard part is trusting the data that is entered into that database. And for this kind of problem the best construction we have found so far is dedicating some institution to that purpose and have copyright-holders proove their ownership of their data to that institution. But if you have an institution that you already need to trust with data entry you can also trust them with data storage or not?

Not sure how a blockchain helps when some guy claims the song I have written on another blockchain. In the end it will be governments who will have to recognize my ownership so I can sue and by that point you can safe yourself the trouble of using a blockchain in the first place.

[ahnick]

Blockchains are highly distributed systems. At least the good ones are ;-). Blockchains have the ultimate uptime b/c every full node has a copy of the database that houses the state and in large blockchain networks (e.g. Bitcoin, Ethereum, Chia) there is always a node available. It's definitely possible to build other HA systems that are not blockchains, but even spending top dollar for 99.99% availability you probably can't approach the uptime of a one of these blockchain networks and especially if you are running your own infra and not doing it on a public cloud provider.

Blockchains are great for proving ownership because you can provide a signature for verification and then that can be cross-referenced to see if that same signature also owns the on-chain data.

There is no getting around the fact that the government chooses the system of record and property owners have to abide that choice. If the government though chose to use a blockchain as the system of record (for all the benefits I listed previously), then you don't need to worry about other blockchains, because that's not the one the government cares about.

[automatic6131]

Create a stanardised piece of FOSS software that can be hosted in (who cares, azure|aws|heroku), a small city then just needs to pay the hosting fees and digitise their records. Now it's as good as 0 downtime for the real world, certainly not even blockchains have 0 downtime. And you don't have the issues of gas wars either.

Oh, the real hard problems are creating the standardised representation of a property deed and getting everyone to use it. Something not at all addressed by use of blockchain!

>Cryptographically prove ownership of a property literally no one is asking for this except the sellers of cryptographic proof.

[ahnick]

Just because you host on AWS doesn't mean you get 0 downtime. AWS regions do go down occasionally. Compare that to a hundred thousand node globally distributed network -> https://dashboard.chia.net/d/em15uQ47k/peer-info?orgId=1

> Oh, the real hard problems are creating the standardised representation of a property deed and getting everyone to use it. Something not at all addressed by use of blockchain!

And Oracle databases addressed this? Standardizing property deeds is more of an application level concern not core blockchain infra.

>Cryptographically prove ownership of a property literally no one is asking for this except the sellers of cryptographic proof.

A good UI/UX would make this a push button capability from a wallet. No need for the general public to understand the technology powering push button verification. :)

[automatic6131]

>Standardizing property deeds is more of an application level concern not core blockchain infra.

You claimed it as a benefit! There's no reason that NFTs for property deeds would: Be standardised, or be on the same chain. That's more an application level concern, so please take that point back.

>Just because you host on AWS doesn't mean you get 0 downtime.

You get as near to 0 downtime as anyone needs for transacting property.

Also, still no one is asking for cryptographic proof of property ownership, even if you make it a single button push. No one needs it now, what does it add? Why is what we have now in need of cryptographic verification? Crypto boosters want it because they're selling it, directly or indirectly. You have not answered this question.

[ahnick]

> You claimed it as a benefit! There's no reason that NFTs for property deeds would: Be standardised, or be on the same chain. That's more an application level concern, so please take that point back.

There's different standard levels right? I'm talking about when you build a property deed NFT you'd have to adhere to the on-chain standard for how NFTs are created on that particular blockchain. Then once those NFTs existed other people could integrate them. If you want the property deeds to have a set of standard specifications of how they deal with particular situations that might arise through inheritance, multiple parties, lost keys, etc. then that would be an application level specification.

> Also, still no one is asking for cryptographic proof of property ownership, even if you make it a single button push. No one needs it now, what does it add? Why is what we have now in need of cryptographic verification? Crypto boosters want it because they're selling it, directly or indirectly. You have not answered this question.

I'm asking for it and I'm sure others would like to have it to. :) Having cryptographic verification provides an ability to quickly prove ownership from an application and then that verification could unlock certain home owner benefits (e.g. HELOCs)

[tallanvor]

Who needs deed information to be available 24/7/365? Why does there need to be a central system that is at risk of DDoS attacks? Why would a city/town/county pay for a system that isn't needed?

[ahnick]

I think pretty much anyone would like systems to be available as much as possible, no? Any website (which nowadays most property assessors have sites) is vulnerable to DDoS attacks and even worse would be ransomware attacks. The system would be an improvement over their existing system and would likely be cheaper. Most city/town/county would pay for such a system as TCO is important to them.

[tallanvor]

I doubt that many people particularly care if property records are available 24/7, or are demanding the ability to update records outside of business hours. Individual pieces of property aren't bought and sold frequently enough to need to be able to be done instantaneously or at any time. Governments have a vested interest in being able to verify that transactions are legal and that identities are known so as to be able collect taxes.

Ransomware or other attacks are always going to be a risk, and the more municipalities that use a single system, the bigger a target it becomes, so smaller but properly secured and backed up systems have advantages.

[ahnick]

> I doubt that many people particularly care if property records are available 24/7, or are demanding the ability to update records outside of business hours. Individual pieces of property aren't bought and sold frequently enough to need to be able to be done instantaneously or at any time. Governments have a vested interest in being able to verify that transactions are legal and that identities are known so as to be able collect taxes.

Cryptographic signatures paired with identity information makes all transactions easily verifiable for tax collection purposes. There are purposes such as proving ownership of a record anytime someone needs to that would be convenient if the records are accessible 24/7.

> Ransomware or other attacks are always going to be a risk, and the more municipalities that use a single system, the bigger a target it becomes, so smaller but properly secured and backed up systems have advantages.

If the past is any indication, local governments and small businesses have had a heck of time securing their IT systems. I would much prefer a hardened blockchain system to secure my property ownership record, than the current situation.

[UncleEntity]

> What value is the property deed?

Its value is that it is proof of ownership certified by whichever county officer has the job to do these things.

> The house has the value - what's the property deed worth?

Literally nothing since anyone can show up at the county office and get a copy. They don’t even ask for ID because it’s a public record.

> If you have the property deed, are you the house owner?

No, the property deed is an official record of the property owner.

With the deed you can prove you own the property but even that isn’t ironclad which is the whole reason there’s a title insurance industry. Which, and I’ll give you this one, could be the only valid reason for “blockchain” in this whole argument but would require having every historic property transaction already on chain or you’d just be where we are today.

[illiarian]

> If you have the property deed, are you the house owner?

That's a great question.

Riddle me this: https://news.ycombinator.com/item?id=27212564

[ahnick]

I'm not sure what you think that proves? Government corruption has and will always exist. If anything, a public blockchain will make manipulation of property records more easily detectable.

[illiarian]

> I'm not sure what you think that proves?

Your question was, quote, "If you have the property deed, are you the house owner?"

I gave you an example of a property deed, and issues that could arise around that property deed. Now, how exactly will blockchain help in the cases I described?

[ahnick]

My original question illustrates that an NFT deed is interchangeable with a property deed. Public blockchains can help expose manipulations of property records because the history of record transactions are available for anyone to check. You don't get that with closed centralized property systems.

[atoav]

I can literally set up a blockchain that says I own the Mona Lisa. Me saying so, or me putting it on a blockchain doesn't make it so.

A blockchain solves the specific problem of how to track ownership of some piece of data in a decentralized fashion where multiple parties do not trust each other.

This, however is not the hard problem when we talk about ownership databases. The hard problem is ensuring the data entered into that database represents actual real world ownership and having the database universally recognized by everybody as a representation of ownership.

What purpose does a database like that serve, when the actual place where the rubber of ownership hits the road is somwhere else?

[ahnick]

> I can literally set up a blockchain that says I own the Mona Lisa. Me saying so, or me putting it on a blockchain doesn't make it so.

Agreed. The parties that are interacting must agree on which blockchain to interact on first. More likely an industry, trade association, or government would say this chain is going to be the system of record of where transactions take place and then individuals and businesses are forced to abide by that. Then once that is decided, any transfer of ownership on that chain would expect to be honored by the transferring party. If not, then consequences would be enforced by the governing industry, trade association, government. etc.

> A blockchain solves the specific problem of how to track ownership of some piece of data in a decentralized fashion where multiple parties do not trust each other.

> This, however is not the hard problem when we talk about ownership databases. The hard problem is ensuring the data entered into that database represents actual real world ownership and having the database universally recognized by everybody as a representation of ownership.

> What purpose does a database like that serve, when the actual place where the rubber of ownership hits the road is somwhere else?

Yes, there is sort of a bootstrapping problem around how do you get people onboarded onto a particular blockchain. For that I think you need some novel use case(s). For Bitcoin it was being the first alternative monetary system. For Ethereum it was the ability to create on-chain programs. Zcash it was private transactions. etc. Once people are onboarded though, then you can use that system to agree on where ownership entry and change of ownership transactions take place. Then you can use the publicly auditable history to prove ownership. For a physical good, then that becomes evidence that can be presented to a third party presiding entity who settles disputes.

[atoav]

> Yes, there is sort of a bootstrapping problem around how do you get people onboarded onto a particular blockchain.

Yeah, but would I like to do that? All these blockchains are literally some shady guy that tells me "trust me and my tech to manage that ownership for you". What is in it for me?

[illiarian]

> The elimination of the need for municipalities to maintain proprietary databases to hold property deeds

Of course it doesn't eliminate the need. Who's going to enter those records and enforce them?

> Standardized and globally interoperable property records across municipalities and potentially countries

Just because it's on blockchain doesn't mean it's standardised, or interoperable.

> Easy to prove and verify ownership of properties, which could be used to grant access to third party services for homeowners.

Yup. Until a corrupt government official puts his friend as the owner of your house and evicts you. Look, the proof is in the blockchain, and it's irrefutable, and cannot be amended.

> Dapps could allow property owners to post the NFT deed as collateral and automate the loan application process to reduce processing costs.

This is just a string off made-up terms that make no sense

[ahnick]

> Of course it doesn't eliminate the need. Who's going to enter those records and enforce them?

The staff still does what they do today, but they no longer need to maintain their own database and IT application.

> Just because it's on blockchain doesn't mean it's standardised, or interoperable.

Once it is on a blockchain it is conforming to a published standard for NFTs for that particular blockchain and others can interact with it and build additional systems that interoperate more easily.

> Yup. Until a corrupt government official puts his friend as the owner of your house and evicts you. Look, the proof is in the blockchain, and it's irrefutable, and cannot be amended.

Because corrupt government officials have never doctored official records that weren't on the blockchain?

> This is just a string off made-up terms that make no sense

No, it's not. A Dapp stands for a "decentralized application" and posting property deeds as collateral is a real thing. Further, being able to do that digitally will likely lower processing costs.

[illiarian]

> The staff still does what they do today, but they no longer need to maintain their own database and IT application.

That's a very minor thing to maintain as compared to the multiple issues that blockchains bring into the mix.

And of course they will need to maintain an IT application: they will need secure wallet implementations, data entry applications to interact with blockchains, security audits for the shitty programs people keep calling "smart contracts" etc.

> Once it is on a blockchain it is conforming to a published standard for NFTs

Ah yes. It automagically conforms to some standard. Just because it's on blockchain.

> Because corrupt government officials have never doctored official records that weren't on the blockchain?

And how is blockchain helping you in this case? Or in the cases I linked: https://news.ycombinator.com/item?id=27212564 and that you even failed to understand.

[ahnick]

> And of course they will need to maintain an IT application: they will need secure wallet implementations, data entry applications to interact with blockchains, security audits for the shitty programs people keep calling "smart contracts" etc.

Most likely a third party company will provide a standardized overlay that government's can tweak to suit their needs, but the bulk of the important data is now stored securely on chain. This should help reduce the security footprint and FTE overhead for governments.

> Ah yes. It automagically conforms to some standard. Just because it's on blockchain.

No magic involved. If you want your NFT to work say on the Chia Blockchain, then you need to conform to this standard -> https://www.chia.net/2022/06/29/1-4-0-introducing-the-chia-n...

> And how is blockchain helping you in this case? Or in the cases I linked: https://news.ycombinator.com/item?id=27212564 and that you even failed to understand.

I've already explained this in another comment. No one is claiming blockchain is helping in that situation and that's okay! :)

[illiarian]

> Most likely a third party company will provide a standardized overlay

So, we're squarely in the realm of magic and wishful thinking.

Some third party (who?) will provide some standardised way (which standards?) that governments will tweak (what? if tweaked, it's no longer standard).

> but the bulk of the important data is now stored securely on chain.

Of course not. Storing anything in bulk on-chain is prohibitively expensive. All you're proposing to store is a hash of off-chain data

> No magic involved. If you want your NFT to work say on the Chia Blockchain, then you need to conform to this standard

Why would government want a) NFT to b) work on Chia?

On top of that, you are literally saying: "You will just need to store a hash of the off-chain data on chain". What's the standard for that hash?

> I've already explained this in another comment.

You haven't

> No one is claiming blockchain is helping in that situation and that's okay! :)

No, it's not okay. You keep saying that blockchain is some solution for something, but every single case runs into "no, you don't use blockchain for that".