it's easy to get blinded by the scams and abuses enabled by new technology, but what matters in the long term are the new benefits and use cases.
will NFTs last? unclear.
however, one benefit is clear and compelling: decentralized royalty capture and IP management.
the NBA and other large enterprises could build and manage IP APIs that mimic NFT functionality.
but what if you're an individual artist? or what if you're taylor swift? today these creators resort to record labels or the equivalent to manage royalties.
NFTs empower individuals to capture royalties and manage IP without a middleman and without needing to build custom APIs; think of them as outsourced APIs.
royalty capture and IP management are the last functions to get disrupted in record label stack. now musicians can choose different "vendors" for the major activities in the value chain, from marketing to funding to creation to distribution -- and now IP/royalty management.
> however, one benefit is clear and compelling: decentralized royalty capture and IP management.
Bzzt. No. This is what NFTs claim they do, not what they actually do.
How do you know that the person creating a NFT has the right to do that? The NFT tracks the chain of ownership for the NFT itself, if the initial person creating the NFT did not own the copyright for the art in question, then the NFT itself is useless.
Second, there is no way for the NFT chain to enforce off-chain actions. If you have the NFT for a copyrightable piece of work and you believe someone is infringing your rights, you must still go to the regular legal courts and sue over it. The NFT itself cannot enforce your IP or collect royalties on your behalf.
> How do you know that the person creating a NFT has the right to do that? The NFT tracks the chain of ownership for the NFT itself, if the initial person creating the NFT did not own the copyright for the art in question, then the NFT itself is useless.
That's very simple. Taylor Swift registers an on-chain address via ENS. TaylorSwift.eth, let's say. Then she publicly posts that public key to the world on social media and her personal website.
Then any mints that come from that address have a chain-of-title back to a publicly announced address.
As the address builds an on-chain reputation, that on-chain history is proof enough of provenance.
The royalties are enforced in on-chain marketplaces.
A lot of NFTs forego the physical court enforcement over IP. In the same way that fake Luis Vuitton purses don't devalue the original, it's largely ignored. It's still quite possible to find free MP3s on torrents, but the vast majority of people nowadays just use streaming services because it's official and they want to support their favorite artists with revenue. Same will go with NFTs.
Your scheme of public keys on websites only works for the Taylor Swifts of the world once they’ve become Taylor Swift. It depends heavily on the social capital of websites verifying identity, a system that is pretty useless for new artists.
This is roughly as practical as pgp key parties were: not practical at all. What are you going to do, go manually check the signing key on every artists website before doing some NFT transaction with them? Crypto already has a UX problem, don’t make it worse!
> A lot of NFTs forego the physical court enforcement over IP. In the same way that fake Luis Vuitton purses don't devalue the original, it's largely ignored. It's still quite possible to find free MP3s on torrents, but the vast majority of people nowadays just use streaming services because it's official and they want to support their favorite artists with revenue. Same will go with NFTs.
You can interpret this in one of two ways.
1) NFTs are completely incapable of managing royalties, so they don’t matter.
2) Things wildly unrelated to NFTs do royalties way better, so it doesn’t matter.
Neither is a good argument for NFTs, as they tacitly admit that NFTs are incapable of doing royalties at all.
Nonsense. Crypto has reputation systems just like everywhere else. I just shipped a successful NFT art project this week with a team. We already made our first 1.5ETH royalty payment from OpenSea in the first 24 hours (although they only pay out once a month, we managed to launch just a day before the cut off). It works absolutely fine.
what did you use to create the art project, if you don’t mind sharing?
re the criticism above, why couldn’t opensea or NFT marketplaces perform verification for you and display twitter-like checkmarks for art sold by owner?
we agree NFT fail in these case. however, these were not the ones i defined nor was there a claim NFTs work in all cases.
the metapoint is that whether NFTs are a fad or fundamental technology will be defined by new use cases, so we should focus analytical efforts there and see if any yield sustainable value.
if taylor swift wants to outsource royalty capture to law-abiding companies, who provide the bulk of royalty revenue, she can do so with NFTs.
we also agree that NFTs do not replace legal courts, but neither do record labels.
will NFTs last? unclear.
however, one benefit is clear and compelling: decentralized royalty capture and IP management.
the NBA and other large enterprises could build and manage IP APIs that mimic NFT functionality.
but what if you're an individual artist? or what if you're taylor swift? today these creators resort to record labels or the equivalent to manage royalties.
NFTs empower individuals to capture royalties and manage IP without a middleman and without needing to build custom APIs; think of them as outsourced APIs.
royalty capture and IP management are the last functions to get disrupted in record label stack. now musicians can choose different "vendors" for the major activities in the value chain, from marketing to funding to creation to distribution -- and now IP/royalty management.
is this enough to sustain NFTs? unclear.