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0 pointsethbr04y ago0 comments

Alternate take: How are NFTs not a more decentralized version of digital goods that already exist?

Game companies (Epic, Activision-Blizzard-Microsoft, etc.) have been (a) creating (b) limited number (c) digital goods that (d) can only be acquired / traded on their platforms and according to their terms.

How are NFTs not (a)+(b)+(c), except without the post-sale, first party control of (d)?

Personally, I think NFTs are the least interesting part of the space. But I think it's odd to say "This is unlike anything legitimate that has come before!", when there are billion dollar gaming companies doing exactly that, in a more restrictive way, every day.

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throwawaysysd4y ago

>How are NFTs not a more decentralized version of digital goods that already exist?

I don't think they are. In practice they also suffer from (d) because the large majority of NFTs appear to be traded exclusively on Opensea. I don't expect this to change at all because any system like this requires some kind of centralized authority to enforce initial ownership of the art before it's placed on the chain, otherwise you get people selling stolen art. Put another way: there is no value to anyone in having alternate trading platforms for these goods, all value is derived from being verified by a particular platform and baked into that platform. It's the same for video game goods, e.g. there is no value in trading a Fortnite dance outside of Fortnite.

ethbr0OP4y ago

Ownership attestation is a pretty common service. Law companies do the same thing for home titles during real estate purchases, and there's definitely more than one provider of that service!

> there is no value to anyone in having alternate trading platforms for these goods, all value is derived from being verified by a particular platform and baked into that platform

Some value is derived from being verified. People sell stolen merchandise and art all the time, albeit at a discount to actual price. And there's nothing intrinsic to that verification that requires Opensea.

If there were an equally trustworthy provider, or even a provider that offered better title insurance, why would people still use Opensea?

> there is no value in trading a Fortnite dance outside of Fortnite

And here's where I think the slightly interesting component is. Isn't there?

If Epic says "ownership of this digital thing gives you this other thing in game", imagine there are two ways to trade that digital thing: (1) within Epic's internal platform, or (2) on an open Blockchain.

Doesn't it stand to reason that (2) is a clearer ownership claim, with less control, and therefore more valuable? And if it's more valuable, then isn't Epic incentivized to sell their digital goods on Blockchain (and get better prices for them) than their internal platform?

throwawaysysd4y ago

>Ownership attestation is a pretty common service. Law companies do the same thing for home titles during real estate purchases, and there's definitely more than one provider of that service!

Sure, but now we're back to talking about properties of the good old common law legal system, which in some ways is already decentralized. It's not benefiting from anything provided by blockchains and crypto.

>If there were an equally trustworthy provider, or even a provider that offered better title insurance, why would people still use Opensea?

To me, it's the same reason everyone still uses Amazon. Blockchains don't change this dynamic.

>If Epic says "ownership of this digital thing gives you this other thing in game", imagine there are two ways to trade that digital thing: (1) within Epic's internal platform, or (2) on an open Blockchain.

Public blockchains do not provide any additional value here. The only important part is if there is consensus between the two parties to agree that the digital thing should mean something in both places. A public "trustless" blockchain is just noise as far as this goes. The whole thing doesn't work if there is no trust between the two parties to agree that token A should correspond to both item B and item C.

>Doesn't it stand to reason that (2) is a clearer ownership claim, with less control, and therefore more valuable? And if it's more valuable, then isn't Epic incentivized to sell their digital goods on Blockchain (and get better prices for them) than their internal platform?

I don't see how this is the case. If I'm not mistaken, you're talking about transferring an item from an Epic game to another game. That means Epic gets the initial payout for the item and the company making the other game gets nothing but still has to expend time and money supporting items that Epic got paid for. I can't see why they would agree to that.

The ownership claim also isn't clearer, both companies could still just decide to shut down their games simultaneously or retire those items and now you're left with nothing.

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throwawaysysd4y ago

>How are NFTs not a more decentralized version of digital goods that already exist?

ethbr0OP4y ago

Ownership attestation is a pretty common service. Law companies do the same thing for home titles during real estate purchases, and there's definitely more than one provider of that service!

> there is no value to anyone in having alternate trading platforms for these goods, all value is derived from being verified by a particular platform and baked into that platform

If there were an equally trustworthy provider, or even a provider that offered better title insurance, why would people still use Opensea?

> there is no value in trading a Fortnite dance outside of Fortnite

And here's where I think the slightly interesting component is. Isn't there?

throwawaysysd4y ago

>Ownership attestation is a pretty common service. Law companies do the same thing for home titles during real estate purchases, and there's definitely more than one provider of that service!

>If there were an equally trustworthy provider, or even a provider that offered better title insurance, why would people still use Opensea?

To me, it's the same reason everyone still uses Amazon. Blockchains don't change this dynamic.

The ownership claim also isn't clearer, both companies could still just decide to shut down their games simultaneously or retire those items and now you're left with nothing.

j / k navigate · click thread line to collapse