HACKER Q&A
📣 nytesky

Do NFTs require crypto – fiat only model


I’m a novice in the crypto and block chain space, and trying to see if NFTs can exist outside crypto markets (working on a paper for a friend). I think if NFTs were running on an independent block chain, you could still transfer NFT ownership by payment with credit card or cash etc, right. Crypto is not intrinsically involved, though I suspect ethereum contracts would help ensure payment and ownership happen simultaneously?


  👤 eva_cananim Accepted Answer ✓
I am not any kind of lawyer, including not being an intellectual property lawyer.

In my view, ignoring all the froth due to fools thinking NFTs are a get-rich-quick scheme that might actually work, it is all governed by the usual copyright, trademark and contract laws and what matters is what a court is likely to decide when someone sues.

Suppose a case goes to court to decide who own the copyright on an MS-paint badly drawn cat. Party A says they bought it from scam-see dotcom and they have an emailed receipt and payment record. Party A says they never sold it. They can subpoena records from scam-see

Party B says that they bought the NFT from a Russian hacker on IRC, they have a secret magic number that they could use to add an entry to blockchain. Party B says that means they own the copyright.

The judge is going to ask Party B if they have a signed contract.

The judge is going to ask Party B if they can point to the section in copyright law that says knowing a magic number means you own the copyright of an image.

In my view, the judge will rule that party A owns the copyright.

At that point all the blockchain bullshit falls apart.

If someone wants to sell the copyright on a badly drawn picture of a cat outside of a 'crypto market' then they can write a contract on a piece of paper and have both party's sign it, perhaps getting a notary to stamp it and getting someone to witness the signing.

In my opinion, that is likely to be more expedient then hoping you can convince a judge that whoever has the newest secret magic number owns the copyright.


👤 akerl_
If you're going to denote ownership separate from the payment system, what is a blockchain doing for you? You'd get the same result with a tabular database with "item_ID" and "owner_ID" columns.

👤 mpeg
They don't at all! In fact, there have been successful NFT collections that handled payments via fiat for stable pricing and used a non-custodial OAuth wallet (eg a wallet that gets uniquely linked to your google/twitter/meta login, in a secure way)

In that way, people could pay with card and obtain the NFT without ever having to deal with a crypto wallet or any cryptocurrency. But with the same distributed benefits that any other NFT has.


👤 haebom
Recently, South Korea has been issuing tickets to popular singers and performances as NFTs to solve the problem of black market ticketing, making them non-transferable.