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NFTs Are a Dangerous Trap

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Re: NFTs Are a Dangerous Trap

#661
post #530

Earlier quoted context omitted.

what is the use-case for an NFT for an in-game virtual good? A sword from World of Warcraft (WoW) can already be traded between players within WoW, since the environment in which it appears is already centralized and that's already provided by the environment. Trading a WoW sword outside of WoW has ambiguous logic. Let's say you sold your WoW sword to a Destiny player. Ok, does the sword still exist in WoW or not? Wh…

I will help clear up some confusion if I'm able. First, I don't think the big use case is for items being traded between different games. However, a system like that is possible. Blizzard would be a good example here, since their games have a high degree of cross-pollination, and they frequently offer promotions that unlock similar items in several of their games at once. So, owning a Blizzard "magic sword" token mig…

You have to look at the bottom line. The only benefit of decentralization is cross publisher items. If it's through the same publisher it can be done in a centralized way. Publishers care about their profits. If NFT can increase their profits they will do it, but if someone buys a WoW sword on Etherum and uses it in Destiny (I haven't played either so please don't nitpick that Destiny has no swords).

Why would the publisher behind Destiny care? Blizzard is the one profiting off the items. Each publisher would create their own mutually incompatible smart contract to maximize profits. Companies absolutely hate the existence of secondary markets. They want cash shop items to be tied to accounts so that every player has to rebuy the same items over and over again. It simply won't work except as an easter egg.

Re: NFTs Are a Dangerous Trap

#662
post #638

Earlier quoted context omitted.

I will help clear up some confusion if I'm able. First, I don't think the big use case is for items being traded between different games. However, a system like that is possible. Blizzard would be a good example here, since their games have a high degree of cross-pollination, and they frequently offer promotions that unlock similar items in several of their games at once. So, owning a Blizzard "magic sword" token mig…

> So, owning a Blizzard "magic sword" token might give you a sword item in WoW, another one in Diablo, and a sword card in Hearthstone, each adapted for its own game. This is a small use case, in my opinion. I'm like 90% certain that there are cross-game item unlocks in Blizzard games already. > NFTs can be programmed such that creators receive an automatic royalty (a percentage of the sale lands in the creator's wal…

That's right, Blizzard does cross-game unlocks already, through their own platform. I don't expect that companies like Activision/EA/Valve would be the ones to use NFTs for this kind of thing, since it's better for them to build and operate their own marketplaces, which gives them total control.

I completely agree with you on the boiling of the oceans. It's a problem that cryptos will have to solve in the long-term to be viable as any part of a green economy. There are a few projects that are energy efficient, but Ethereum and others have work to do. In any case, NFTs aren't specific to any one blockchain.

I think content creation and limitation is a separate issue, and not implicitly part of NFTs. You can issue a token representing a particular game object, with no ability for the player to customize or modify it. You bring up an interesting point though - there could be a limited, controllable level of customization available to players. Consider a smart contract that mints NFTs and allows certain attributes to be modified, which could affect the cosmetic or functional details of the in-game item they represent. You could sell a class of NFTs representing a certain sword, and players could pay extra for a golden version, or a version with infinite durability.

For Steam Workshop, I think you've identified exactly the issue. They control the marketplace, and set the rates. If it's more profitable for a developer to set their own rates/royalties, and it's easy enough to implement, and there are enough players willing to use NFTs (or a platform that manages NFTs for them) then we'll start to see developers use them. Marketplaces aren't mutually exclusive, so you could have some items on Steam, and others on blockchain. You could make certain desirable items exclusive to the platform that nets you the most profit.

I agree regarding difficulty of implementation - this is something that most developers won't bother with at the moment since it doesn't make economic sense, but as the ecosystem develops we'll likely see companies that provide a simpler abstraction layer for NFTs (perhaps even specializing in games). As the implementation costs drop, we'll start seeing adoption. This might take several years.

Regarding blocking I/O, I don't think it would work like that, just like it wouldn't work as p2p. A game server could poll the history of its smart contracts (or the abstraction layer provided by a service platform) every few seconds or minutes, and update its centralized database of items to match whatever transactions have occurred. All reads within the game would still be to its own database, and not directly from a blockchain.

Re: NFTs Are a Dangerous Trap

#663

Earlier quoted context omitted.

Cosmetics in games largely have value due to the game being online and multiplayer, which means NFTs aren't useful for them because there is already a central server to manage ownership. They don't buy cosmetics just to show off their status, but to actually make their character look different when playing with a group of people who can see it. It's rarely "oh look - expensive" it's more "oh look - freaking Cowboy Ur…

That will change when cosmetics can be shared across multiple games, which is already starting to grow with the onset of custom multi-game avatar+identity APIs being provided to game developers. When you avatar persists across multiple different games, it makes sense to have an ownership mechanism that isn't managed by a single central authority.

What economic incentive to game developers have to respect NFT ownership? Or anyone, for that matter?

In VRChat, you can be any model.

If I had a game, I wouldn't care who owned the NFT. It's not a value add. As far as I'm concerned, anybody could use it.

Re: NFTs Are a Dangerous Trap

#664
post #380

Earlier quoted context omitted.

Here's my Mr. Brightside view of it, there is a Black Mirror-esque side as well as some humans build towards utopias and some build toward dystopias. I look at the quality of life and good side of things where I can. I agree with most of what you are saying but that is based on the current era. Created scarcity and exclusives are annoying but there are pros and cons. Putting value to something will create markets and…

Few things - I think the whole AR world could end up pretty sad. Imagine I go to a friend's house and all the art on his walls is mine? Like a world I've chosen where I'm not exposed to anyone else's tastes and choices? That aside - isn't this all still likely to rely on something central ? I mean it sounds like you're talking about something pretty close to Ready Player One (which was owned by a central corporation)…

The web was supposed to be distributed.

But we wound up with Facebook and Google.

AR and the metaverse will be the same.

Re: NFTs Are a Dangerous Trap

#665

Earlier quoted context omitted.

I will help clear up some confusion if I'm able. First, I don't think the big use case is for items being traded between different games. However, a system like that is possible. Blizzard would be a good example here, since their games have a high degree of cross-pollination, and they frequently offer promotions that unlock similar items in several of their games at once. So, owning a Blizzard "magic sword" token mig…

You have to look at the bottom line. The only benefit of decentralization is cross publisher items. If it's through the same publisher it can be done in a centralized way. Publishers care about their profits. If NFT can increase their profits they will do it, but if someone buys a WoW sword on Etherum and uses it in Destiny (I haven't played either so please don't nitpick that Destiny has no swords). Why would the pu…

Totally agree - this will only happen if it makes economic sense for the developer. Big companies like Blizzard won't bother since they can build and manage their own marketplace, but smaller developers who can't afford to do that will still be able to unlock value by participating in an open market.

Players re-buying the same item is definitely profitable, but it may turn out to be more profitable in the long-term to allow players to freely trade items while taking a cut of each transaction as royalties. Also, as mentioned before, NFTs allow for single-use items. A game could provide all sorts of different items with different rules.

Re: NFTs Are a Dangerous Trap

#666

Earlier quoted context omitted.

Correct. Although there is only one brand that has sold a Tweet NFT for $3mil. The enforcement, interestingly, is more traditional; the owners of the "Valuables by CENT" trademark can use existing legal structures to prevent anyone else using that name. Meanwhile the NFT is digitally linked to the Valuables by CENT smart contract on Ethereum, which will presumably have an 'author' property attached to it, set to the…

> The enforcement, interestingly, is more traditional; Ah, so they pinkie swear not to do it a second time?

It would be equivalent of Sotheby's starting a second brand competing with themselves, but yes.

Re: NFTs Are a Dangerous Trap

#667
post #610

Earlier quoted context omitted.

But when you buy a baseball card you get a card. Here it seems that you only get a receipt stating that you have paid (aka the certificate) AND NOTHING ELSE.

If I understand it correctly, that receipt in conjunction with your keys allows you to prove you own the NFT and can control it on the blockchain(sell it, trade it, etc).

But the NFT is the receipt, if I understand correctly. You own a receipt (the NFT), and you can trade it, but why are people buying and selling receipts? You make a payment, you get a receipt, and nothing else, which makes absolutely no sense. Usually, when you buy something you get a receipt for free and then the actual thing that you have bought.

Re: NFTs Are a Dangerous Trap

#668

Earlier quoted context omitted.

It certifies two things: 1. That you paid a certain amount for the certificate. 2. That there will never be another certificate for the same thing, from the same brand of certificates (e.g. "Valuables BY CENT"). Pretty much exactly like owning a baseball card, then.

But this would only make it unique on the CENT blockchain, no? What if another blockchain becomes the standard offerer, wouldn't that devalue everything on the CENT blockchain? Further, wouldn't we expect multiple blockchains to be competing to become the "primary" chain in which these items are deemed valuable, i.e. CENT and blockchain A & B & C trying to be the medium which holds a unique cert to Jack's first tweet…

That's correct. Which makes it all even more absurd. Although the smart contracts are there forever, so at least it can't "go bust" (although the web front-end certainly could).

Re: NFTs Are a Dangerous Trap

#669
All worth is in the eyes of the parties to a transaction. Sometimes you can take comfort that there is a cohort with similar thoughts. You probably got your starting thoughts from that cohort. But caveat emptor, that expensive house might go down in value as the crime rate rises in the neighborhood, and maybe your “investment” in fine china and antiques disappears because lifestyles and interests change. A NFT for ownership of Woody Allen’s Sleeper would probably be worth less now than its peak value.

Meanwhile, a big (or the main) point of the art was the environmental impact. That part seems really pertinent to keep in mind.

Re: NFTs Are a Dangerous Trap

#670

Earlier quoted context omitted.

What happens when a judge says "no, the person who the NFT says owns the house doesn't, it's Bob over there"? When it comes down to it, the entry on the local tax rolls or property registration office is going to be the one that counts.

I don’t really get your point. What happens when a judge says “you don’t own your house any more, the government owns it now”? Well, what happens is you lose your house. The fact that the government can circumvent any notion of property ownership isn’t really a criticism of any particular notion of property ownership.

Just highlighting “there’s a trump card over your claim to ownership lurking out there.”
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