It's mine ... You can't touch it without my permission. Ownership is the only right you need. Buying a product and having the "right" to copy it and resell is inconsequential to me.
This is pure, unfiltered delusion... depending on the NFT in use anyway. First and foremost, what actually is yours? You have an immutable entry in a ledger giving you the ownership of the blockchain blob corresponding to your NFT, and the data in that NFT is undeniably yours, but that data is the only thing you actually 'own' in the blockchain. So what does this mean?
Let's talk NFTs! We can start with the most popular form...
The most popular form of NFT right now, is the "Gallery Site" style of NFT, used by places like IPFS, Arweave, OpenSEA, etc. The data you 'own' is metadata that allows you access through the service of
that server to access
something on their server in a way that is controlled by the metadata in question. It is assumed that the contents of the server are being provided in good faith and that the level of ownership being conferred is legally possible. The site acts as the steward for the space of the digital good, and you have the key to it. While in some cases it can be copied or reproduced, you alone have the 'key' to 'that version' on 'that site'. You can then 'sell that key' based on the marketability, reputation, and history of 'that version' on 'that site'. The nice thing is that metadata is tiny. Like, kilobyte tiny, so you don't need much blockchain to store it.
This is not now wholly without merit, and oftentimes chains of ownership, which blockchain technology is explicitly capable of, is one of the largest sources of value in an artistic work. Famous artists get more money for their works, and legacy goods can fetch high prices.
What happens, however, when that service goes down or removes the artwork in question due to copyright violations? You now own a 'key' to a 'specific service' on a 'specific server' that contains wholly nothing. Does it lose its value? This is where the first issue with NFTs comes in:
It is assumed that a NFT that leads to nothing still has value inherit in the ownership of the space where something once was. Supposedly, this may even hold true even if they entire gallery is removed from the internet, which means that
the value of this kind of NFT is wholly disconnected from the actual contents the NFT points to.
This is why there is a bit of scumminess involved. If the value of the NFT has nothing to do with what the NFT points to, what is the point of having an NFT point to anything at all? The only conclusion I have is that it is trying to invent the value of legacy by tying itself, sometimes without permission or willingness, to a sense of ownership of something. Since that ownership is not actually granted within the NFT (the thing you 'own' by blockchain tracking) it is in fact, a scam. You are thinking you have purchased something you have not.
It is perfectly acceptable in this model to have two separately valued NFTs that lead to the exact same image or data hosted on different servers as separate entities, and the uniqueness is based on the server that hosts each image, not the actual image or data itself!
Now, one of the other kinds of NFTs...
When people argue for NFTs, they often think of a full dataset contained within the portion of the blockchain that they own. This is a second kind of NFT, and is actually far more interesting. It is much more expensive to create in blockchain data (kilobytes of metadata vs hundred of megabytes for high resolution images, meshes, zip file, etc) but you have a snapshot of unchanging data from when it was first placed into the blockchain.
This comes at a cost, however. Any data placed into the blockchain is accessible from the blockchain itself. While there is a discrete record of ownership of that section, by having a full, readable file in the blockchain anyone on the blockchain can view it and in doing so, copy it. You 'own' that section, but the data itself is visible for all blockchain users. While the first kind of NFT can use more then a single method of ownership validation (metadata + login being the most common), having the file just out there means that it can be perfectly duplicated and reused. Your ownership is a matter of record, but the security and uniqueness of the item outside of that record is simply not possible. Once more, we are relying on the NFT itself having the value over the data it actually contains. 'This instance of this data is unique'. While this kind of selfish thinking I disagree with, it is not without merit. Although as in the first example,
it is perfectly acceptable to put a second copy of the data into the blockchain and sell it as a wholly different NFT. They would both be considered 'original' NFTs. This is why NFTs are an issue. They claim to be non-fungible but the data that they are basing this claim on is anything but non-fungible. Welcome to the digital age, scarcity is a lie.
What about Star Citizen? How can we wedge NFTs into Star Citizen?!
This is the heart of the matter. I see these posts all the time, "Can we add NFTs to Star Citizen?" Well yes, you can also paint a giant dick on your forehead and declare yourself ruler of the seven combined governments of Mars, but the question isn't 'can we' but 'how do we' and 'what impact will this have on the game'?
For example, we can utilize NFT metadata combined with a transaction ledger to act as a two-factor authentication for certain content in game. To access this, you need to have a game account that is tied to your ledger account so that these can be cross referenced. With the NFT in your ledger and your account on the game, the item is yours to use. You can then sell the NFT to someone else who likewise has their account tied to their transaction ledger, and now they have that instance of the item.
"Montoya's Original Aurora" would probably sell really really well on the NFT market.
So what about trading these things, and making some real money after
stealing acquiring Montoya's prized Aurora? Well, this is where CIG starts to lose out. Selling NFTs is something that can be done in a distributed manner, and so once the NFT is out and about, any further money from that Aurora no longer has an effect on CIG's earnings. For adding in all this additional two-factor overhead, working the system to give uniqueness and value to the NFTs, CIG's payday from it will be...
Nothing.
That's a horrible end to an executive summary! Do more work, maintain more systems, and get none of the rewards! But, you can make some of your players rich and famous, I guess. Assuming that they build up their own block chain for data storage to lesson the initial impact of crypto-crunching, once you reach a certain amount of blockchain data you hit diminishing returns on the power and CPU/GPU usage to continue to create space for more NFTs. While this is the secret behind Bitcoin's valuation, it adds overhead that increases over time - in general for a company, you want your overhead to decrease over time in relation to your earnings. This is backwards!
The Gray Market is 0 additional overhead to CIG. On the other hand, Montoya's prized LTI Aurora would just sell at the value of a LTI Aurora without the NFT ownership chain, so the gray market value wouldn't be quite as high. For CIG though, they wouldn't see that money either way, so its more cost effective to just let the grey market work, since it does not change their bottom line.
Let's look at another angle, ship uniqueness. You can have a 'unique' hull ID paired to a digital good to give it in game heft. This would leverage NFT technology in a useful way, still utilizing the metadata version of an NFT. The issue now becomes what happens when all possible hull numbers for a particular model are sold as NFTs? What happens when a hull is destroyed? Currently, that hull number is lost. This would match current 'real world' examples such as cars - you own a unique car with a unique VIN, and if you wreck it or it explodes that ownership is now moot, and that VIN cannot be re-used as it was listed as 'exploded'. What benefit does this give to the player? How about to CIG?
To the player, nothing has changed except more investment in keeping a ship running due to the possibility of loss of the (presumed investment) NFT. For CIG, they now have to track every hull number across every instance of every ship spawned or generated as they have implications both in and out of the game. How about fraudulently selling someone your exploded ship? You could buy a NFT hull number and load it up and find out that not only was it exploded, but it was never even salvaged so it is a total loss. What if someone (*legally) salvaged it in game? Well... all that work they did in game means nothing because they don't 'own' that hull, no matter if they pulled it out of the Stanton sun on a weekend binge of caffeine and sugar. Because once something is 'owned' in the blockchain, it can't be transferred without the 'owners' doing it.
Once more, a lot of additional work on CIGs part for a mechanic that they will not see a penny from. More work for zero return does not reflect well on a business. And now, Salvaging just became an issue as it can undermine the uniqueness of what you purchase - even possibly open the company up for legal action.
Why NFTs don't work for CIG or Star Citizen
The idea behind NFTs is to have a unique version of something that is otherwise infinitely fungible. To own an 'instance' of an item, backed up by blockchain technology. This primarily turns that instance into something that can be sold, purchased, or collected independently of the source using that same distributed blockchain technology.
Without there being something that the NFT is connected to, either internally or externally, there is nothing really different from an NFT to say, Dogecoin, and in reality it wouldn't need to be connected to any game at all at any time. There is no reason to add the overhead of such a system to a company that is making money by building a game, because it is a cost center with no return to the business - due to the distributed nature of block chain just like the grey market, there is no way to earn anything from these sales other then selling 'more' of them. So it provides no benefit to CIG for all the overhead spent in mining, new code, tracking, and handling customer support fallout.
What it does do, is provide a venue for speculative investors to purchase and resell things, investors that may not even have a Star Citizen account or have anything to do with the game at all. We're not talking small dollar amounts, either. Montoya's
stolen salvaged original Aurora could probably let me retire early and just play Star Citizen until I die cold and alone, surrounded by empty pizza boxes and beer cans.
An interesting side effect is that it would be possible to 'steal' unique items outside of the game. Bitcoin has been stolen before, and there is no shortage of methods used to get into someone's ledger. With NFTs, this theft can be done without ever having an interest in Star Citizen at all. Even if the ship was recreated by CIG, it would lack the value of the original, since otherwise NFTs would just be Fungible Tokens. Finally, a game loop for piracy!
