This is my main problem with the “promise” of NFTs. It is appealing to people that don’t understand the applicable laws around actual ownership of digital goods and assets. I have had the unfortunate (but luckily, cheap – just shy of 5-figures cheap) experience of having to negotiate ownership of a digital asset (software code) which, at a minimum, involved questions around intellectual property and copyright. Since proponents of NFTs don’t even begin to include these in their vocabulary, any claims of “ownership” are not even on the table.
NFT proponents are also at the opposite side of the table of the old previous “digital ownership” wars. They’re on the side of the MPAA and RIAA of the old Napster battles: hackers back then said “LOL I can copy a floppy/VHS/file” and the MPAA/RIAA tried their very best to enforce the concept of “ownership” which includes language like licensing. That the NFT crowd also doesn’t include that language in their vocabulary, also is a strong indication that claims of “ownership” are not even on the table.
To see why, let’s quickly examine how “ownership” outside the blockchain, in the real world, is enforced when a dispute arises. Parties involved appeal to the legal system. If a party is unwilling, the legal system appeals to force which is deemed lawful in sovereign states. That’s typically imprisonment and fines. Thus, people are compelled to comply under the implicit threat of force. And (based on my experience, which was multinational), there are treaties between sovereign states that agree to use this implicit threat of force in a reciprocal manner. I’m purposefully not invoking specific legal machinations (ex: DMCA) because this is the broader principle at play.
Let’s contrast that “ownership enforcement” within a blockchain. When a dispute arises – someone copies bytes off of the blockchain itself, or they follow the URL on the blockchain and copy those bytes – what authority and recourse does the “owner” actually have? If it is the legal system of the sovereign – congrats, it is a chain backed by the state, and it’s really fiat currency once again, “because the state says so”. So to avoid that, the “owner” has to threaten the use of their own force against the infringer/violator, and this libertarian ideal falls far short because in many sovereign states vigilante violence – the mere threat of force – will itself land a person in jail. So because of fiat power – the power of the sovereign nation – the “owner” can’t even use their own threat of force to enforce their own digital ownership rights on-chain.
Proponents then point out “but the chain says they own it and everyone trusts the chain”. Well, no, not everyone will trust the chain, let alone the same chain. There is no compelling threat of force that makes people say “I not only trust a chain, I trust the same chain as everyone else, and I promise to observe their ‘ownership’ rights as it says on chain”. This principle of good-faith died spectacularly when – for all his technical prowess – Vitalik Buterin and friends made the incredibly unprincipled decision to fork the Ethereum chain because “oopsie it doesn’t look right to us”. There is no reason to believe the current-popular Ethereum chain is the “right” chain, when Ethereum Classic is the more principled chain, so now Pandora’s Box is open: when Concerned Mothers of America create a non-CASM-containing chain fork, who is to say that is not the right one?
There’s no judiciary and no police for any blockchain – it just becomes a competition between cabals of developers over who has authority over the chain, but only for people who bought into the ownership promise. For everyone else, there’s no axe/police+judiciary hanging over our head forcing us to recognize its legitimacy.
No one – Vitalik, you, me, anyone else – has that monopoly of “threats-of-violence-that-don’t-land-you-in-jail” except sovereign states. Hence, the incredible rush to FOMO and hype to try to appeal to people with carrots instead of sticks. The truth is, some people simply can’t be bought, but every person bleeds.
I’m really surprised I have to point this out to people that play Eve of all places: the game notorious for players who only “own” the things they are able to personally defend using threats of force.