There are numerous configurations, networks, and commercial structures that can be created for NFT offerings that can mitigate "problems" described in the OP and accommodate for different tradeoffs.
A simple retort would point to the many alternative NFT networks that don't use POW-based consensus algorithms or the NFT offerings that enable value add offerings very differently than purchasing art or baseball cards.
Evaluating the capabilities of NFTs against the value offerings of something like rare art is an apples to oranges comparison. Of course the market for digital assets offered via NFT is immature and speculative; this is a new market, based on an alternative technology paradigm, that has a long way to go before it settles into a more usable and valuable structure.
Ultimately, the idea of using key-pairs pegged to widely accessible peer-to-peer public networks as a mechanism for tracking ownership of digital (or near digital or at times even physical) assets is incredibly novel. It turns the conventional model of third-party hosted digital assets on its head and enables really interesting mechanisms of distribution, ownership, access, and value consumption and creation that does not compare well with traditional mechanisms. And in saying it doesn't compare well I mean to acknowledge its limitations and its potential at the same time. However, the critique in the OP is pretty bland and doesn't seem to acknowledge the full scope of the situation.
> Evaluating the capabilities of NFTs against the value offerings of something like rare art is an apples to oranges comparison.
Someone should tell that to all the artists who are selling NFTs with the implication that they're analogous to owning original works.
I agree that it's apples-to-oranges, which is why so many people are appalled at the charlatans who are successfully selling these oranges as apples.
> It turns the conventional model of third-party hosted digital assets on its head
How so? The assets that are "sold" as NFT are still hosted somewhere.
Owning the NFT for something does nothing more than copyright already does. You can store the digital asset on your computer with or without the NFT. You can "consume" it either way as well.
So what if the digital asset is an item in a video game? The game can check to make sure you own it before you use it!
Yes, it can. But the creator of that game can also choose not to do that, just as anyone can choose not to respect copyright.
> I mean to acknowledge its limitations and its potential at the same time
What is its potential? What can someone do with NFTs that they couldn't do before?
> What is its potential? What can someone do with NFTs that they couldn't do before?
The novelty comes from the underlying protocols that back the NFT. These protocols create marketplaces that are widely available and accessible and are reliably secure and robust.
Take copyright for example. Copyright laws vary across regions and marketplace. The encoding and repudiation of these copyright laws is based on analog processes. The data related to the assets in question are stored in databases with a widely varying degree of access. Verifiability across assets or even within a single asset class varies and to varying degrees of reliability. And I'm not saying this to point out that copyright laws and the assets relying on them have failed or are not value add in many ways. The fundamental point is that the technological infrastructure underlying the use of copyright laws today has a lot to be desired when it applies to ease of use for digital media.
Networks using blockchain protocols can offer a natively digital infrastructure solution that helps extend or replicate the value offered by something like copyright law. The natively digital aspect enables broader interaction which engenders more general purpose usage which ultimately leads to new consumer models (i.e. direct artist to consumer, peer to peer, etc.).
> Owning the NFT for something does nothing more than copyright already does. You can store the digital asset on your computer with or without the NFT. You can "consume" it either way as well.
The point is not to displace copyright law)(although others may argue this I do not). The value add here is in creating a widely accessible and reliable digital mechanism for creating, expressing, and modifying ownership rights. Different, or maybe even traditional, consumption models are then built on top of this to capture this value.
To your point about gaming creators choosing to do so or not; this question is really a question about what is the value of blockchain protocol networks in the first place and how would someone like a game creator benefit or capture this value? To this point, I can only point out the potential benefits as I'll be the first to agree the nature of blockchain and its value is still being explored. My arguments above are trying to express the value as I see it.
Would be curious to hear more thoughts and criticism.
The point you’re making is valid, but you’re side stepping the key concern being raised.
The tokens you acquire are worth nothing.
Nothing about owning a token grants you any rights to anything other than what some other person is willing to pay/exchange it for.
So if a game developer chooses to accept tokens, you can use them; but that developer can at any time choose to stop accepting tokens or a subset of tokens making what you own worth actually nothing.
Now... for a regulated system of tokens (eg currency) a developer can’t do that: they are legally bound to accept fiat currency even though it is not redeemable for any “real” equivalent (eg gold).
Since a token is not bound to the DRM access to an item (say, image for example), it’s totally pointless to asset ownership with it, because it does not prevent the copy of the original digital asset.
The best you could ever hope for would be a regulated system, in which access to an asset via DRM was granted by a token.
...at which point, any “decentralised” benefit is lost.
So ultimately, the risk is 100% on the buyer here.
What you buy may be redeemable for something for some period of time... but that is true of any kind of token.
The “uniqueness” of the NFT is an illusion; it does not offer any strong guarantee of uniquely representing an actual asset.
> Now... for a regulated system of tokens (eg currency) a developer can’t do that: they are legally bound to accept fiat currency even though it is not redeemable for any “real” equivalent (eg gold).
This isn't true in general. Legal tender status is very loosely an obligation to accept for existing debts, but it is not an obligation to accept it as, say, a means of accepting a offer. So unless they are giving you goods first, and the looking for payment (which certainly is not the norm for digital goods), they are under no obligation to accept currency.
But that's really why everyone will always accept them, because they can pay their debts/taxes with them. It's probably a common misconception because it's so close to correct.
Rephrasing your questions and critiques more broadly: What is the point of all this digital infrastructure if no one uses it? Why would anyone use it?
This is a more difficult question for NFTs as the market is even smaller than the financial use cases which has been driving blockchain applications. It'll take some time for seemingly legitimate and long-lasting value in areas for NFT to emerge as they are still being explored and developed.
However, no matter how you frame it, rhe value proposition for applications comes down to the value add characteristics of the networks they are built on top of.
> The tokens you acquire are worth nothing.
The tokens worth is determined by the market place that emerges around the tokens characteristics.
Some tokens are censorship resistant and run on globally accessible networks so that they are not easily erased, their ownership is easy to prove, and their history is reliably known. Some tokens are required to access other marketplaces or services because they have properties that make them more easy to use as traditional currencies. Some tokens allow for self-ownership paradigms.
Again, the tokens acquired carry the value of the characteristics of the networks in which they are issued. What these characteristics are valued as and actually "worth" in real economic terms is dependent on their demand.
> The “uniqueness” of the NFT is an illusion; it does not offer any strong guarantee of uniquely representing an actual asset.
This is only true if the NFT isn't accepted as value. If the characteristics I described earlier indeed do become valued, then the ledger which holds the claim i.e. the NFT will be taken as the source of truth for representing the ownership of the claimed asset. Its the theory of accounting applied to a different space.
> the NFT will be taken as the source of truth for representing the ownership of the claimed asset...
I simply can’t see how that is possible for digital assets you can copy and paste and have two copies of the original asset; it only works for physical assets where there can only be one copy of the asset, ever.
You’ve hit it on the head: what does it mean to own an image when ten other people also “own” a copy of it, and any of them can create more copies other people can “own”.
It’s meaningless, unless you assert ownership entitles you to additional legal rights beyond what the token conveys... and in which case, how the hell is that different from the same thing with no crypto involved?
> unless you assert ownership entitles you to additional legal rights beyond what the token convey
This is precisely the idea to a certain extent. The ledger serves as proof of ownership which then allows access to entitlements dictated by that ownership. This being done in a digital first way is another aspect as well (although not really conceptually mind blowing to me personally).
> how the hell is that different from the same thing with no crypto involved?
This goes back to what I said earlier about the characteristics of the underlying network driving the value. The differences can be in things like the peer-to-peer nature or the decentralized infrastructure which provides a degree of censorship resistance or improved accessibility.
We're at the point where credible evidence of the value added by these characteristics is still being explored. You can certainly make some level of argument as to why the decentralized nature of these protocols is better than the traditional alternative, but even I'll admit its difficult to parse through the noise of speculation and hype for the arguments that may be worth a damn.
The idea of distributing control, responsibility, costs, and other aspects of operating a system away from singular points of failure is an idea that seems worth investigating and to me this is what blockchain is doing. NFTs are a different flavor of exploration then that of cryptocurrencies.
> You’ve hit it on the head: what does it mean to own an image when ten other people also “own” a copy of it, and any of them can create more copies other people can “own”.
Also worth remembering: doing anything with a digital asset involves automatic creation of countless of copies. When you're viewing an image from your computer's storage, you already have at least three copies at that moment - one in storage, one in RAM, and one in video memory. There may be another one in your screen's buffer too. If you try to send it through the network, every switch and router along the way effectively creates its own temporary copy.
This is to emphasize: ownership as a concept makes no sense in the world of bits. It doesn't exist. Ownership is defined by agreement between people; these days, usually through the legal framework.
Possession of the private key also allows you to create signatures which prove your ownership, while not revealing your private key. Artworks could be encrypted and only decryptable by such signatures. Client applications could be built to incorporate this.
We have a big problem today in that our information technology's ability to infinitely create copies of digital artifacts seemingly breaks the incentive mechanism to create. I.e. art, news, authorship worked better when you could sell physically sell copies of your album, book, painting. This has resulted in a glut of low quality stuff.
Think of the long term. It would be very good for society to solve this problem. With the distribution abilities of the internet, plus the ability to monetize adding incentives to create, we should see much more, and higher quality art. It would enable more of our economy to move online, which would be good for the environment. I.e. humans are mostly interested in social status. Today we show that status by creating and showing off possessions. But also we need jobs. What will people do for work in 2050? Perhaps we'll still be busily working to climb the pile of monkeys, but now with virtual goods. That's more sustainable than the current situation.
For a hacker & technology forum, Hacker News is remarkably negative on crypto topics. Part is a justifiable reaction against the hype. Another part I think is FOMO. But also, the crypto space is only partially about technology. It is very inefficient technology from a functionality point of view. But from an economic point of view, where the problem is coordinating human activity in the way that money does, I think there's a lot of potential there.
At a certain point there is more risk in being a "permabear" than there is in taking a measured interest. The crypto space has been growing for 12 years ... is it really just a giant fraud at this point? No value, nothing of interest at all?
> For a hacker & technology forum, Hacker News is remarkably negative on crypto topics. … The crypto space has been growing for 12 years ... is it really just a giant fraud at this point? No value, nothing of interest at all?
The negative reaction is _due_ to HN being a technology-heavy forum: the blockchain field is a marketing invention and divides into two camps: Merkle trees, which are useful but not new, and everything else, which is uncompetitively reinventing commonplace concepts with language designed to attract speculators’ money. For a decade, salespeople have been showing, repeating marketing points which don’t hold up to much thought, and hammering the “use your money to make me rich” message, so it’s not surprising that it’s hard to get attention with the same spiel now.
Put another way: after 12 years, huge amounts of money and attention, where’s anything clearly better than its predecessor? (For the user, not the seller) That’s considerably longer than it took for the web to have a huge impact on advertising, sales, dating, travel, banking, research, job hunting, etc. despite much lower barriers to adoption. Someone trying to invent a new DRM system to make signed prints isn’t remotely close.
> where’s anything clearly better than its predecessor?
At the moment, there isn't a single alternative product for a state-free currency as a store of value that has reached the valuation of Bitcoin.
I'm not even a Bitcoiner, but if this isn't proof to you at this point, nothing will satisfy you. The proof doesn't have to convince you it's the future of currency, but it should certainly statisfy the question of "how has blockchain enabled anything new and interesting?".
The truth is, blockchain is less of a technological innovation than it is an organizational one. It is technology that attempts to digitize human organizational patterns as opposed to simply analog processes.
Those selling crypto to the moon and profiting off of the hype certainly ruin it for everyone. The promises, the lies, the failure to deliver is certainly an issue to take up. At the same time, there is quite a bit behind the lies that is worth looking at.
> At the moment, there isn't a single alternative product for a state-free currency as a store of value that has reached the valuation of Bitcoin.
I thought the Bitcoin people stopped referring to it as a currency a few years ago when it became obvious that it had failed to be capable of filling that role? The current “store of value” sales pitch seems likely to follow a similar trajectory since, unlike a reserve currency like the USD or a traditional commodity like gold or real estate, it has no inherent value other than the current social consensus and is thus highly volatile.
This comes back to the same question of what value it offers. Someone who wants buy or sell things defaults to faster, cheaper, and safer options. Someone who wants to save value has faster, cheaper, safer options which have much longer track records of predictable valuation. A devout libertarian who thinks “state-free” is important similarly has a range of options, many of which do not conveniently provide their government with an itemized log of every transaction.
> How so? The assets that are "sold" as NFT are still hosted somewhere.
This is what I don't understand. It's like a baseball used in a World Series game and then signed by members of the team and the Certificate of Authenticity that accompanies it. The value of the CoA is when it ACCOMPANIES the baseball and authenticates it. I don't see how the CoA in and of itself has any value when the baseball is in someone else's possession.
> There are numerous configurations, networks, and commercial structures that can be created for NFT offerings that can mitigate "problems" described in the OP and accommodate for different tradeoffs.
Ah, yes. The goid old "might", the adage as old as the whole blockchain itself.
Translation: "will painstakingly re-invent all the attributes of what real world needs, and already has, and doesn't need blockchain in the least".
A new medium requires reinventing and making explicit "real world" constructs. The article rejects anything worse than the best part of current systems without making clear the explicit tradeoffs. I could retort and point to companies actually using blockchain but you can easily argue flaws in their implementation. A "real world use case" is not well defined.
> The article rejects anything worse than the best part of current systems
For a technology that's frequently hailed as the best new thing since sliced bread, it's quite telling that it can't exhibit a single of the best parts of current systems. And it's replete with parts that are worse than even the worst parts of the current systems.
> I could retort and point to companies actually using blockchain but you can easily argue flaws in their implementation.
Of course I would. And the articles argues as well, successfully. Because for the absolute vast majority of these real-world companies anything they do can be done better, faster, and more efficiently without the use of blockchain. And if the are not busy scamming people, they are busy re-implementing, often poorly, those "best parts of current systems" that you're so quick to dismiss.
Blockchains are definitely oversold and overhyped but they do make improvements in certain areas. It's like discounting TOR just because steaming youtube is a lesser experience.
Their use of consensus mechanisms make what was implicit explicit. Their global nature is truly without borders. Specific cryptocurrencies are mathematically private and more censorship resistant.
Blockchain for the most part isn't ready for the vast majority of people, but discounting it entirely seems like throwing the baby out with the bathwater. Not everything needs blockchain but for the things that do they really do.
Real world companies also make tradeoffs, often a single point of trust (the company) and implicit assumptions or state.
The current systems that work are great and I don't want to dismiss them at all, but there are specific cryptocurrencies that currently serve some specific needs better. In future I'd imagine there are other ways to take advantage of DHT to serve even more needs better.
If you're not willing to consider the hypothesis of value proposed by blockchain I can genuinely understand why and it makes sense. Lots of other areas to invest personal time and effort in.
Search "govops ca kai stinchcombe" and you'll see the doc.
> So, not even the value proposed by blockchain but the hypothesis of the value?
Of course. This is a nascent and emerging market. To act as if this is anything but a hypothesis on what may be valuable is a lie. This is true of every emergent market ever.
> What would those values and hypotheses be?
See my other comments in this same thread if you'd genuinely like to engage in discussion. The value is derived from the characteristics of the network protocols and the hypothesis is these values are difficult to achieve without the protocol and that they will come to be highly desired.
As a simple example, take the oft common hate for Google accounts being deserviced. A globally accessible, immutable ledger representation of a user account could be a theroetic start in the direction of mitigating the problems of thirs-party owned account data.
> Search "govops ca kai stinchcombe" and you'll see the doc.
Did you read the file you're referencing? Let me quote it for you (emphasis mine):
--- start quote ---
Permissioned blockchains as a datastore
Solutions can be built on either open source datastores (like mysql or postgres), on proprietary datastores (Oracle), or on blockchains.
Our position on this topic is that the proof is in the pudding: let the bidders describe the system they can build and the costs, let them choose the underlying technologies they will employ, and let the state’s procurement officials select the most competitive bid. If blockchain offers an advantage, they will be well positioned to win in the marketplace.
Unpermissioned or semi-permissioned blockchains as a datastore
..., recall that the most complex and burdensome aspect of maintaining a non-Torrens ledger is preventing false data from entering the system. Absent tremendous progress in digital identity, we believe the types of title fraud commonly seen in the lived experience of the several states would be increased by such a system.
--- end quote ---
The only place he "recommends" blockchain is in (paraphrasing): "governments should not be afraid of new technologies, and new technologies like blockchain should also be proposed on equal footing as other technologies. However, all these technologies should be evaluated whether they have the potential to make search, record validation, or detection of error or fraud cheaper, faster, or more accurate"
> See my other comments in this same thread if you'd genuinely like to engage in discussion.
Others have already answered to that.
> The value is derived from the characteristics of the network protocols
Technology on its own has very little merit.
> These values are difficult to achieve without the protocol and that they will come to be highly desired.
Which values? If you're talking about "this is the proof of ownership", the entire value falls apart at the point of data entry (see the articles I linked).
> As a simple example, take the oft common hate for Google accounts being deserviced. A globally accessible, immutable ledger representation of a user account could be a theroetic start in the direction of mitigating the problems of thirs-party owned account data.
Riiiight. And what will stop anyone from not accepting your immutable ledger representation of a user account in a service? Just the fact that it's on a blockchain? In the form of NFT? How will this help you if you still can't access any services?
He's literally not recommending it in the paper linked. [1]
> There's quite a bit of spirited discussion regarding these points elsewhere.
You'd think that if there was such a discussion, there would be links to it, or articles addressing these points. But,... no.
[1] Edit.
Here's section on permissioned blockchains as a datastore (emphasis mine):
--- start quote ---
Solutions can be built on either open source datastores (like mysql or postgres), on proprietary datastores (Oracle), or on blockchains.
Our position on this topic is that the proof is in the pudding: let the bidders describe the system they can build and the costs, let them choose the underlying technologies they will employ, and let the state’s procurement officials select the most competitive bid. If blockchain offers an advantage, they will be well positioned to win in the marketplace.
--- end quote ---
Here's section on unpermissioned or semi-permissioned blockchains as a datastore (emphasis by the authors):
--- start quote ---
recall that the most complex and burdensome aspect of maintaining a non-Torrens ledger is preventing false data from entering the system. Absent tremendous progress in digital identity, we believe the types of title fraud commonly seen in the lived experience of the several states would be increased by such a system rather than decreased.
--- end quote ---
And then:
--- start quote ---
(v1) We do not see any reason that a permissioned blockchain is inherently more likely to be error-free or fraud-free than the existing system, and so do not believe new technology supports a move to Torrens any more than was the case in the past. (We are open to being proved wrong!)
(v2) Torrens title system implemented on an unpermissioned blockchain. For the reasons described above, we believe this would be a disaster
(v3) imagines that the potential for fraudulent transactions being entered into the blockchain is reduced by using smart contracts or similar means. ... [lists the very serious issue with fraud]
We do not believe the technology is ready to seriously consider moving tens of millions of property owners collectively holding $4 trillion worth of real property in California onto a system such as this one... In contrast, if the adoption was mandatory and universal, it seems likely that just its first year adoption of a system like this would lead to thousands or even tens of thousands of homes being irrevocably and fraudulently transferred
--- end quote ---
And the only "recommendation" is this: if you're evaluating technologies, evaluate all tech, including emerging tech like blockchains on equal footing, and that includes, quote, "potential to make search, record validation, or detection of error or fraud cheaper, faster, or more accurate". In all the points above they considered blockchain on equal footing, and found it wanting.
It's not an obituary, and you'd know it if you'd bothered to read it. It very aptly describes the perpetual state of bitcoin in particular, and of blockchains in general.
I read it, it’s an article from 2017 proclaiming bitcoin is worthless for a payment system while it is now 2021 and amount of value exchanged on bitcoin is more than ever. Author is clueless and the article is worth nothing.
> it’s an article from 2017 proclaiming bitcoin is worthless for a payment system
It's clear you didn't even pretend to read it. Or understand all the problems listed. Payments is just a part of the first article. The sequel doesn't even talk about payments.
> it is now 2021 and amount of value exchanged on bitcoin is more than ever.
Amount of value exchanged on bitcoin !== it's useful for payments. Actual payments (you know, for goods and services) are a very, very, very tiny fraction of exchanges.
> Author is clueless and the article is worth nothing.
Ah. So you didn't actually read it. Or you'd try to address the authors' points (or link to an article that addresses his points) like:
- The key feature of a new payment system is the confidence that if the goods aren’t as described you’ll get your money back (bitcoin has none, and is busy reinvents centralized institutions to help with that)
- The government-backed banking system provides FDIC guarantees, reversibility of ACH, identity verification, audit standards, and an investigation system when things go wrong. Bitcoin, by design, has none of these things.
- In terms of micropayments, people enthuse that bitcoin transactions are free and instant. Actually, they take about eight minutes to clear and cost about four cents to process. <- This is now outdated. It's significantly worse now. Median confirmation time is ~10 minutes (and was as high as 25 minutes just a few months ago [1]) and transaction fees ar $13 to $30[2]
^ And that's just payments
The article and its sequel go on to discuss the issues with smart contracts, distributed storage, computing, and messaging, authentity verification and so on.
> It's clear you didn't even pretend to read it. Or understand all the problems listed. Payments is just a part of the first article. The sequel doesn't even talk about payments.
it's clear you didn't even pretend reading my comments or understand the words i'm writing. we can be playing this game all day.
> Amount of value exchanged on bitcoin !== it's useful for payments. Actual payments (you know, for goods and services) are a very, very, very tiny fraction of exchanges.
since when you're the authority on what counts as useful and what counts as actual?
> The key feature of a new payment system is the confidence that if the goods aren’t as described you’ll get your money back
that might be the key feature in the payment system of your choice, but it's the anti-feature for people who find bitcoin valuable. finality of transactions is way more important and on top of a system with finality you can build all sorts of escrow services that offer money-back due to customer dissatisfaction and what not. without finality your payment system is worth shit.
> The government-backed banking system provides FDIC guarantees, reversibility of ACH, identity verification, audit standards, and an investigation system when things go wrong. Bitcoin, by design, has none of these things
again, all anti features. i don't want them in a system that handles my assets. thank you very much.
> In terms of micropayments, people enthuse that bitcoin transactions are free and instant. Actually, they take about eight minutes to clear and cost about four cents to process. <- This is now outdated. It's significantly worse now. Median confirmation time is ~10 minutes (and was as high as 25 minutes just a few months ago [1]) and transaction fees ar $13 to $30[2]
this also shows how clueless you yourself are in anything bitcoin related. confirmation time is a function of hashrate fluctuations, not some inherent property of bitcoin that gets worse with time. and the article author is obviously clueless for even claiming nonsense like "people enthuse that bitcoin transactions are free and instant", his exposure to bitcoin is probably a single drunk talk in a bar.
and btw in payment channels payments are instant and essentially free and unlike visa and other payment processors, payment channels are completely independent and dont require centralized coordination, so i can already claim with all seriousness that bitcoin is able to process unlimited number of transactions per second.
read up on the topic before arguing.
PS I personally made an on chain payment today, the fee was less than $2, which is still great considering that micropayments were never supposed to be on chain to begin with. And yeah, fees today are higher than fees last year because Bitcoin is more expensive and fees are denominated in bitcoin, duh.
Ah yes. "Anti-features" like protecting your money.
It's easy to "refute" the point and call the author "clueless" if you just call anything useful an anti-feature.
> this also shows how clueless you yourself are in anything bitcoin related.
and immediately:
> And yeah, fees today are higher than fees last year
So you're just confirming the point tht the author said and my update to his numbers.
> micropayments were never supposed to be on chain to begin with.
That's some interesting mental gymnastics. So, according to you, bitcoin is not a worthless payment system, but at the same time you're claiming that it's not supposed to handle the largest chunk of what payment systems routinely handle. I guess, micropayments are an anti-feature, too?
> Ah yes. "Anti-features" like protecting your money.
they aren't protecting your money, they are protecting the financial system in which you're currently being fucked but it happens so slowly that you've fooled yourself into enjoying it.
> It's easy to "refute" the point and call the author "clueless" if you just call anything useful an anti-feature.
how can you not? bitcoin has transaction finality by design. that's the purpose of bitcoin. that's one of the core features. when somebody comes criticizing bitcoin for not having an opposite anti-feature - what are they if not clueless?
> > And yeah, fees today are higher than fees last year
quoting out of context should be bannable offence. also you're just displaying your own ignorance and inability to understand a trivial thing - fees in bitcoin denominated in bitcoin didn't change, price of bitcoin change.
> So, according to you, bitcoin is not a worthless payment system, but at the same time you're claiming that it's not supposed to handle the largest chunk of what payment systems routinely handle
nah, you just didn't understand words. i'll break it down: bitcoin is a system with limited on-chain settlement capacity due to reasons. this means that lower value settlements will get priced out by higher value settlements because higher value settlements can afford to include larger fee. on top of this system one can in context of single on-chain settlement execute billions microtransactions with micro-fees that in aggregate make the onchain settlement economically viable.
so bitcoin is very much capable of handling unlimited number of transactions per second, you just don't understand how it achieves that.
your understanding is on the level of "so your shipping containers with motors attached cant even cross the atlantic ? what's the points in that?", missing entirely the idea of container ships.
> they aren't protecting your money, they are protecting the financial system
Ah, yes. Let's imagine a real-world scenario: I pay for some goods. The seller never delivers the goods.
Real world: I have an arsenal of tools at my disposal that can help me return my money.
keymone and bitcoin: no, it's an anti-feature, these tools only protect the financial system.
> how can you not? bitcoin has transaction finality by design.
Please say "finality of transaction by design" a few more times. This will surely address the issues raised.
> fees in bitcoin denominated in bitcoin didn't change, price of bitcoin change.
and immediately below:
> lower value settlements will get priced out by higher value settlements because higher value settlements can afford to include larger fee.
So chose one, please. The fees didn't change? Or they change all the time, and you have to pay for the "privilege" of sending money?
> so bitcoin is very much capable of handling unlimited number of transactions per second, you just don't understand how it achieves that.
I mean, you can call 0 an infinity and even do maths around that. However, there's an actual tangible reality: actual real-world transaction times in bitcoin are 10 to 30 minutes. Your "infinite transactions per second" don't work if I pay for something and have to wait for 30 minutes for the transfer to settle.
> on top of this system one can in context of single on-chain settlement execute billions microtransactions with micro-fees that in aggregate make the onchain settlement economically viable.
Ah, yes. The mythical systems that are yet to materialize anywhere. And, by the way, if you're creating a separate system to aggregate multiple transactions, that's ... centralisation. Something that bitcoin is supposed to be against.
> missing entirely the idea of container ships.
So far you've addressed zero of the issues raised besides payments. And with the issues about payments you've demonstrated next to zero understanding of what people realistically want from a payment system. Oh, and you've devolved to calling white black and vice versa ("10 to 30 minutes per transaction is actually unlimited transactions per second").
It’s like you’re trying to misunderstand and not understand on purpose...
Bitcoin has finality and on top of bitcoin you can build the arsenal of tools.
Lower value transfers got priced out because fees that previously were low in dollar terms have become high in dollar terms because Bitcoin was previously $1 and now it’s $50,000.
Payments in payment channel are settled as fast as your internet latency because they don’t need to be settled on chain, that’s what payment channels do.
Payments inside payment channels are not constrained by anything but you system IO, and there are lots of payment channels acting independently, so for all intents and purposes transaction capacity in bitcoin payment channels is infinite.
Payment channel systems are already built and they don’t require centralization.
You obviously know next to nothing yet you keep arguing trying to pretend to be smart and knowledgeable.
> on top of bitcoin you can build the arsenal of tools.
Which shows again that you didn't read the article, or read it and didn't understand a single argument in it.
> Lower value transfers got priced out because fees that previously were low in dollar terms have become high in dollar terms because Bitcoin was previously $1 and now it’s $50,000.
So, both the article and me were correct about transfer fees.
> Payments in payment channel are settled as fast as your internet latency
Once again, payment channels are required due to inherent limitations of Bitcoin. So, in order to combat the absolutely real and valid issues raised in the article, you dismiss them out of hand, while... advocating for additional systems built on top to valiantly combat these issues. smh
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Only two transactions are settle on the Bitcoin blockchain. the first transaction and the last. The first transaction is used to open the channel by locking the funds, and the last one to close channel and get each participant his final balance back. So in a typical payment channel, only two transactions are added to the block chain but an unlimited number of payments can be made between the participants.
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So, all transactions are happening outside bitcoin in a completely separate system just because Bitcoin can't handle all this.
> so for all intents and purposes transaction capacity in bitcoin payment channels is infinite.
Of course it's not :)
It's two transactions in Bitcoin, so the actual transaction time of the actual assets in Bitcoin that people care about will be (10 to 30 minutes) times 2.
And it's the capacity of the payment channel, and that depends on the implementation.
And on top of that the actual true transaction time and transaction capacity will depend solely on when the payment chain will commit those transactions to blockchain.
Oh, yes. They still don't solve the actual use-case of "micropayments": receiving multiple "micropayments" from multiple people. So, a cafe would get flooded with "micropayments" from dozens of people during rush hour. In payment channel terms this will be two transactions per person with a micropayment on a blockchain with unknown fees and waiting times. Perfect.
> Payment channel systems are already built and they don’t require centralisation.
Of course they do. It's a separate system built outside of bitcoin that aggregates multiple transactions between users. Aggregation simply by definition implies centralisation.
> You obviously know next to nothing yet you keep arguing trying to pretend to be smart and knowledgeable.
These ad hominem attacks sure do make you look smart and knowledgeable.*
There are numerous configurations, networks, and commercial structures that can be created for NFT offerings that can mitigate "problems" described in the OP and accommodate for different tradeoffs.
A simple retort would point to the many alternative NFT networks that don't use POW-based consensus algorithms or the NFT offerings that enable value add offerings very differently than purchasing art or baseball cards.
Evaluating the capabilities of NFTs against the value offerings of something like rare art is an apples to oranges comparison. Of course the market for digital assets offered via NFT is immature and speculative; this is a new market, based on an alternative technology paradigm, that has a long way to go before it settles into a more usable and valuable structure.
Ultimately, the idea of using key-pairs pegged to widely accessible peer-to-peer public networks as a mechanism for tracking ownership of digital (or near digital or at times even physical) assets is incredibly novel. It turns the conventional model of third-party hosted digital assets on its head and enables really interesting mechanisms of distribution, ownership, access, and value consumption and creation that does not compare well with traditional mechanisms. And in saying it doesn't compare well I mean to acknowledge its limitations and its potential at the same time. However, the critique in the OP is pretty bland and doesn't seem to acknowledge the full scope of the situation.