Can't NFTs work on Bitcoin?

[BlackHatCoiner]

First of all, I'd like to confirm that I have the correct technical background of the way NFTs work in my mind. So, let's say Alice wants to sell her digital art (image) to Bob.

1) She hashes her image and announces to everyone that this hash is owned by her.
2) Bob gives Alice an invoice which says she gives the rights of her art from her address to Bob's.
3) Once she announces it, it's Bob's. Now Bob can prove to anyone it's his art and Alice can prove it was her art before she handed it out to Bob.

In order for Bob to upload his now-owned art, he chooses as many NFT marketplaces as possible and uploads the file plus the hash. Any seller can verify it's Bob's and that he hasn't lied.

Let's see how can this work in Bitcoin:

1) Alice creates a transaction containing the hash of her image next to OP_RETURN and the state of her art. (Currently hers)
2) Bob gives Alice his address.
3) Alice creates another transaction which contains the hash of her image and a statement which reveals she wants to give the rights of her image to Bob, revoking her previous transaction rights.

Therefore, people can see where the first transaction of that art was made and follow the spent outputs to reach the current owner.

[1714259478]

1714259478

[1714259478]

1714259478

[Trojane]

It's a very nice conception though because it's gonna look self explanatory to most peeps who are unimaginably skeptical anyways
Point one:
These is not going to make Bitcoin decentralized anymore because you're trying to say that everyone that has traded with those coins must inherited those transaction histories just for clarifications and that will mean downloading piles and piles of histories which makes it very cumbersome.
Point two:
 Uhmm.. but don't you think if it implies in Bitcoin, most likely when they're sold or swapped to a scammer because(it isn't written on the face neither the addresses) don't you think if the person involved was supposed to begin the trade and probably sends btc first and he/she was scammed that it will mean lifting up voluminous trade histories and hashes just to possibly find a way to get him (the scammer)?
We'll, perhaps I was only referring to these antiquated Bitcoin not  when we'll nutured programmers will make all their efforts to creat  "Bitcoin pro" in it's highest dexterity!
Point three: Alice and Bob traded digital arts with money and they didn't trade money ITSELF I think it's not gonna look proper because these images doesn't have:
*Value *it isn't a legal tender* it can't be sold to anyone except upon request,.
 ...as the currency it was bought with...
This is just to my own discreetion 🙂
Been a while,
Trojane ❣️

[larry_vw_1955]

First of all, I'd like to confirm that I have the correct technical background of the way NFTs work in my mind. So, let's say Alice wants to sell her digital art (image) to Bob.
...

I guess in theory something like this could work but it seems like too much effort to involve bitcoin as most people that buy nfts online probably don't going to go to the trouble of checking the bitcoin transactions and hashes and stuff.  nfts are an ethereum thing not a bitcoin thing. as well, a hash doesn't really stop someone from counterfeiting an nft image.

[n0nce]

I haven't yet read up enough on NFTs to confidently answer your question, but I'm pretty sure that they work a bit different from what you described.
Also, I already came across 'Bitcoin NFTs', which are sold on https://raretoshi.com/. While it's 'on BTC', it actually uses the Liquid sidechain.

But it is definitely possible to implement NFT directly on Bitcoin; simply through using a coloured coin.
To be honest, we have these for years and they can directly act as an NFT without any modification to the spec.

Digital collectibles

Decentralized management of digital assets. Just like art collectors buy and sell original copies of famous paintings for millions of dollars today, colored coins allow us to do the same with purely digital objects, such as songs, movies, e-books and software, as well, by storing the current ownership of the work as a colored coin on the blockchain.

[pooya87]

Obviously!
What we need to keep in mind in topic of NFTs (or by extension tokens) is that there has never been any connection between the token and the underlying object whatsoever. For example in case of artwork (digital or physical) it is an arbitrary data (eg. a hash) that is stored in a blockchain and a non-existent link between that data and the art.

For example I could sell you a pen and store a string mentioning "your name and the name of the pen" in blockchain as a NFT showing I sold you that pen. Whether I deliver the pen or if the pen exists at all doesn't prevent my ability to create that NFT and selling it for real money!

So obviously it could be done using bitcoin's OP_RETURN outputs. You could even define your own smart contracts that are completely different from bitcoin's smart contracts (scripts) and push it after the 0x6a!

[garlonicon]

they didn't trade money ITSELF

That point can be easily solved by using zero satoshis. Then, you never move any coins, you create zero outputs just from thin air, in this way you can easily create and destroy any such output in any transaction. Of course, currently you can only do that in test networks, in mainnet you have to use at least dust amount. And of course you have to always cover transaction fees, even if you move zero coins.

most people that buy nfts online probably don't going to go to the trouble of checking the bitcoin transactions and hashes and stuff

Of course. But you don't have to make such transactions by hand, you can have some client doing that for you.

[larry_vw_1955]

What we need to keep in mind in topic of NFTs (or by extension tokens) is that there has never been any connection between the token and the underlying object whatsoever.

then it's strange that people think such a connection exists. which is obviously why they are buying.

For example I could sell you a pen and store a string mentioning "your name and the name of the pen" in blockchain as a NFT showing I sold you that pen. Whether I deliver the pen or if the pen exists at all doesn't prevent my ability to create that NFT and selling it for real money!

Not only that but it then becomes the buyer's responsibility to get to store the NFT artwork somewhere. Hopefully they store it somewhere that doesn't cause them to lose the artwork by having their account deleted due to inactivity or some other issue.
Forever is a long time...heck even 5 years is 

[BlackHatCoiner]

It's a very nice conception though because it's gonna look self explanatory to most peeps who are unimaginably skeptical anyways

Not only this. It'll bring even more uniqueness to the digital items. Imagine broadcasting your NFT to the Bitcoin network, which is yet, the most decentralized among all. I don't know about you, but I'd definitely want to own something from the cryptocurrency we all agree, than from Ethereum, Solana etc., which are known for their terrible money distribution and hierarchical structure.

Uhmm.. but don't you think if it implies in Bitcoin, most likely when they're sold or swapped to a scammer because(it isn't written on the face neither the addresses) don't you think if the person involved was supposed to begin the trade and probably sends btc first and he/she was scammed that it will mean lifting up voluminous trade histories and hashes just to possibly find a way to get him (the scammer)?

If you're asking how will the trade work trustless-ly, there are bunch of ways. Without changing anything in the protocol, we could achieve this with HTLCs, same as in the Lightning Network.

Point three: Alice and Bob traded digital arts with money and they didn't trade money ITSELF

As said by garlonicon, we'll just burn few sats with the hash included. However, I'm not 100% sure that you can't send 0 sats with OP_RETURN in mainnet.

[pooya87]

then it's strange that people think such a connection exists. which is obviously why they are buying.

The connection is a promise that they are related. In fact these days the "digital artwork" that is being sold for millions to idiots is stored elsewhere on a centralized website not even on the blockchain and if that website's server goes down or if it were shut down by the government, all the "artwork" goes away too. Meanwhile the tokens continue to exist on the blockchain uselessly!

Not only that but it then becomes the buyer's responsibility to get to store the NFT artwork somewhere. Hopefully they store it somewhere that doesn't cause them to lose the artwork by having their account deleted due to inactivity or some other issue.
Forever is a long time...heck even 5 years is 

They don't seem to care or maybe they don't understand this either. Both the token and the object are stored centrally and they can go away, I explained it for the object but the blockchain of these tokens like ETH is mutable so they can decide to reverse blocks that would wipe out those tokens.

[garlonicon]

As said by garlonicon, we'll just burn few sats with the hash included. However, I'm not 100% sure that you can't send 0 sats with OP_RETURN in mainnet.

You can send zero satoshis in OP_RETURN, it is standard. But I thought about creating spendable zero satoshi outputs, then you can create, move and destroy your NFT directly, just by spending it. You can use taproot public key as the owner's public key and place your NFT, splitted into small pieces, into your tapscript.

[ABCbits]

But it is definitely possible to implement NFT directly on Bitcoin; simply through using a coloured coin.
To be honest, we have these for years and they can directly act as an NFT without any modification to the spec.

Colored coins prove majority of Bitcoin community don't really care about NFT/token which shown by lack of interest.

What we need to keep in mind in topic of NFTs (or by extension tokens) is that there has never been any connection between the token and the underlying object whatsoever. For example in case of artwork (digital or physical) it is an arbitrary data (eg. a hash) that is stored in a blockchain and a non-existent link between that data and the art.

For some people, it's not connection between NFT/token with object. NFT is proof that you're legitimate owner of the object, although it has no legal power and many people don't care about it.

[BlackHatCoiner]

if that website's server goes down or if it were shut down by the government, all the "artwork" goes away too.

You're supposed to download every art you purchase. You shouldn't leave your products on third parties. The whole NFT thing works as long as there's at least one NFT marketplace. An analogy with bitcoin is to always have at least one centralized exchange.

NFT is proof that you're legitimate owner of the object, although it has no legal power and many people don't care about it.

Doesn't this apply with bitcoin too? It doesn't have a legal power, but people care about it a lot, because it seems useful to them. I can't think of one serious real-world utility of the NFTs in contrast with bitcoin, but I can acknowledge the demand of some people to own an object digitally.

[pooya87]

For some people, it's not connection between NFT/token with object. NFT is proof that you're legitimate owner of the object, although it has no legal power and many people don't care about it.

And that's another fundamental problem with NFTs

You're supposed to download every art you purchase. You shouldn't leave your products on third parties. The whole NFT thing works as long as there's at least one NFT marketplace. An analogy with bitcoin is to always have at least one centralized exchange.

This reminded me of another fundamental problem with NFTs, both the owner and anybody else in the world can also download the "art". In fact someone has already done that and shared the whole database of "art" with the world like piratebay called The NFT Bay with 19 terabytes of data!
https://www.vice.com/en/article/xgdxvw/someone-made-a-pirate-bay-for-nfts

[BlackHatCoiner]

This reminded me of another fundamental problem with NFTs, both the owner and anybody else in the world can also download the "art".

This isn't a problem, but a feature. Yes, anyone can download the art, but none of them can provide a proof of ownership of the art except the current owner. Anyone who gives me this article and tells me NFTs are useless is benighted the least.

It's like telling me they own BTC without providing me a valid signature. Okay, you can enjoy looking at the address, but you don't have the rights to move the BTC. When you transact BTC, you do exactly the same thing; you transfer the rights of those BTC. A sign that says it's not yours anymore.

[n0nce]

This reminded me of another fundamental problem with NFTs, both the owner and anybody else in the world can also download the "art".

This isn't a problem, but a feature. Yes, anyone can download the art, but none of them can provide a proof of ownership of the art except the current owner. Anyone who gives me this article and tells me NFTs are useless is benighted the least.

It's like telling me they own BTC without providing me a valid signature. Okay, you can enjoy looking at the address, but you don't have the rights to move the BTC. When you transact BTC, you do exactly the same thing; you transfer the rights of those BTC. A sign that says it's not yours anymore.

Well, the big difference here is that with BTC there's no 'enjoying' / joy in looking at an address, nor can that address by itself be otherwise meaningfully 'used' compared to image NFTs which are used as profile pictures or printed for the joy of looking at them.

NFTs are basically (exclusive?) rights to an image (or something else) but instead of being a written contract, it's on a Blockchain. In both cases however, people can steal / copy your owned object of course. That's why the NFT (or contract) exists: to allow you to go to court, prove the ownership and have the stolen item / image taken down / returned.

In both cases, you need to go through a legal route if someone infringed your copyright / stole your item. NFT doesn't 'fix' this. Worst case (highly probably), in most countries an NFT is not accepted in court at all.

[BlackHatCoiner]

Well, the big difference here is that with BTC there's no 'enjoying' / joy in looking at an address

There's obviously a huge difference between watching arbitrary characters and videos, but I'm just saying it's the same analogy. You don't own bitcoins if you don't provide a proof; you don't own the video if you don't have a proof.

NFTs are basically (exclusive?) rights to an image (or something else) but instead of being a written contract, it's on a Blockchain. In both cases however, people can steal / copy your owned object of course. That's why the NFT (or contract) exists: to allow you to go to court, prove the ownership and have the stolen item / image taken down / returned.

Again, the exact same thing happens with bitcoin. You can't use bitcoin legally as there's no law referring to it (in most countries). You don't pay your taxes using bitcoin. Only people who have acknowledged its significance use it. Same goes for NFTs; only people who have come into an agreement that the block chain is their holy bible and therefore, says the truth, use it.

It reminds me of this:

It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self fulfilling prophecy.

Everything comes with interest. It remains to be seen if it'll continue succeeding as I have my doubts. I still cannot comprehend what distinguishes other cryptos from bitcoin in this part. It makes you wonder if it's, indeed, just a hype...

[PrimeNumber7]

Obviously!
What we need to keep in mind in topic of NFTs (or by extension tokens) is that there has never been any connection between the token and the underlying object whatsoever. For example in case of artwork (digital or physical) it is an arbitrary data (eg. a hash) that is stored in a blockchain and a non-existent link between that data and the art.

You are accurately describing how NFTs work today, however, NFT as a concept is something that could potentially translate into real-world use.

For example, the Los Angeles County Register of Deeds could issue NFTs to real estate owners representing ownership of their property. The owner of a property could transfer their property to another person by transferring their NFT to another person. In this example, the Los Angeles County Register would need to agree (probably via statute) to recognize an NFT as ownership of a property. If you are buying a NFT representing ownership of real estate property, you would need to make sure the LA County Register actually issued the NFT (which can be done via reviewing the blockchain), and you would need to trust the LA County Register of Deeds, however, you need to do the later anyway if you are buying property in LA County.

The above could reduce the costs associated with selling your property, as it would make things such as title searches much easier, and would nearly eliminate title insurance payouts, which should reduce the cost of title insurance.

I do agree that the concept of using NFTs to transfer "digital art" is more or less bogus. It is trivial for someone to create a similar image of something that already has an NFT with a different hash, and to alter the image in a way such that it is difficult to find the original image (if you don't know where it is).

[larry_vw_1955]

For example, the Los Angeles County Register of Deeds could issue NFTs to real estate owners representing ownership of their property.

Some things you just don't see like this headline:

"Register of Deeds moves to NFTs to lower costs for real estate owners."

I could see them using blockchain tech but not to lower the costs for citizens that type of thing doesn't happen.

[PrimeNumber7]

For example, the Los Angeles County Register of Deeds could issue NFTs to real estate owners representing ownership of their property.

Some things you just don't see like this headline:

"Register of Deeds moves to NFTs to lower costs for real estate owners."

I could see them using blockchain tech but not to lower the costs for citizens that type of thing doesn't happen.

Maybe not in Los Angeles, or anywhere else in CA. I could see this happening in other parts of the country.

There are taxes associated with transferring property from one person to another, however, the costs I was referring to were things such as performing a title search, and title insurance, both of which are paid to entities other than the government.

The tricky part about these types of transactions is how to handle situations in which the owner claims to have lost their private key. Technically speaking, there are ways the issuing authority of the NFTs could transfer the NFT/token (for example by having a smart contract have the ability for their private key to be able to transfer an NFT unilaterally), but this would raise some questions about the benefits of using the bitcoin blockchain (or any other blockchain) to track property ownership. Maybe one option would be for the issuing authority to attack a court order to any transaction in which they unilaterally transfer ownership of a property.

[larry_vw_1955]

There are taxes associated with transferring property from one person to another, however, the costs I was referring to were things such as performing a title search, and title insurance, both of which are paid to entities other than the government.

same thing though. private businesses might find a benefit/cost savings by using blockchain but they don't necessarily pass any of that on to the consumer. for example car insurance. rates are going to be based on real world data not how much money the blockchain saves them.