Discussion Post: The Metaphysics of NFTs

Discussion Post: The Metaphysics of NFTs

  • Link to source
    The Metaphysics of the Metaverse

  • Content type tag (summary, discussion)
    Discussion

  • Category
    Mechanism Design and Game Theory

  • Proposed tags
    #NFT #dNFT #smartcontracts #mutability #discussion

  • Key Problem
    How to represent paradoxes of identity that can be depicted in the real world as actions on NFTs on a Blockchain. The following copy of my article published on LinkedIn describes the problems and an outline of proposed solutions using Smart Contracts and Oracles.

  • Specific Questions
    How to express and implement the arbitrary mutability of objects represented as NFTs. Representing all objects as composites of NFTs corresponding to molecules, atoms or quarks is not practical nor scalable, neither is representing all space as Planck length voxels. However, actions and potential actions on objects representing the real world require more fidelity than pre-defined components.

  • Approach / Paper

The Metaphysics of NFTs
by David Edelsohn, IBM Research

How does one represent the Ship of Theseus paradox (also known as the Grandfather’s Axe paradox) with NFTs in the Metaverse? If one replaces the axe blade and the axe handle, is it still the same NFT?

The Ship of Theseus paradox is a foundational principle of the metaphysics of identity that dates back to Heraclitus and Plato circa 500 BCE. If one replaces the boards in a ship (or the axe blade and axe handle of an axe) is it still the same ship (or axe)? If the objects depicted as NFTs on a Blockchain cannot represent the paradox, it cannot represent and emulate reality.

The Metaverse digitally represents both real and virtual objects on a Blockchain. Paradoxes that exist in the real world must be equally representable through NFTs and operations on NFTs. An object represented in the Metaverse must be arbitrarily and dynamically divisible or fusible with other objects on demand, as determined by the “laws of nature” in which the object exists in the respective Metaverse. While NFTs are immutable, the objects that they represent are not immutable and the NFTs must reflect the transformations that occur to the real object or are permitted by objects in the Metaverse.

Consider a shirt in the Metaverse for which the owner chooses to move a button to another shirt in the Metaverse, or a thread, or a speck of dust, or the impurity in one silk thread. Or consider a container of Himalayan salt for which the owner wants to separate the sodium chloride from the 84 other trace minerals. It’s not practical nor scalable to divide space in the Metaverse to the Planck length volumes or to track the all of the components of objects at the subatomic level. And it’s also unnecessary. Instead of tracking the composable objects at arbitrarily fine and/or limited granularity, an operation associated with the NFT must provide the ability to respond to a request for an arbitrary transformation.

If the rules for permissible actions were associated with, encoded in or calculated by NFT Smart Contracts, NFT Smart Contracts would permit fusion or fission of an object on demand, when queried, and at the granularity requested. The Smart Contract would allow the Blockchain network and validators to divide, combine or copy the NFT, as allowed by the contract, to represent the transformation of the corresponding object, and to generate a new object or objects representing the final disposition of the transformation, ideally at the coarsest granularity that can accurately represent the final state. For example, an NFT representing a quantity of Himalayan salt would be transformed to an NFT representing a chemically appropriate quantity of sodium chloride and an NFT representing an equally appropriate quantity of trace minerals, not N mole NFTs of NaCl and M mole NFTs of KCl, Q mole NFTs of Mg, etc.[1]

The Smart Contract program (possibly in conjunction with an external “oracle”) would determine if an object transition is allowed using a combination of predefined decision tree, predefined allowed transitions, predefined rejected transitions, predefined transitions based on the identities of the entities in the transaction (principals and agents), transitions based on cached information from recent, previous transitions, transitions based on cached transitions from other, similar objects handled by the Blockchain miner or validator, transitions based on cached transitions from other, similar objects handled by the Blockchain network, transitions based on artificial intelligence (AI) inference, and transitions based on an external, central authority. The Blockchain network would agree, through consensus of multiple miners or validators achieving the same result, that the transformation is valid.

On a private Blockchain network, the decision making authority is clearer and the decision making process for permitted transformations is simpler (e.g., consensus unnecessary), but the scalability issues driving a more efficient solution remain. It is not practical for the Metaverse to represent and track the finest granularity of every object. Video games follow the same principle to only generate what can be seen when it is observed. The Metaverse must follow the same principle of object representation: NFTs should be created and correspond to the coarsest granularity that represents the object and its ownership necessary for the required, observable action.

The current NFT ecosystem provides the concept of fractional ownership or fractional value, but that corresponds to portions the NFT representing the object or a quantity of an unchanging object, not characteristics or components of the object itself mutating. The ecosystem also has been extended to composability of NFTs, but applied in a predefined, large granularity sense. Operations on NFTs (Smart Contracts) must intermediate and arbitrate these operations on demand.[2,3,4,5]

An object in the Metaverse has properties that can be bought, sold, rented, lent, transferred, loaned, moved, or copied to one or more other objects based on the rules defined for the object. If the property is not shareable, then the object loses that component. If the property is shareable, then the entity receives a copy with a subset of the permitted, shareable properties. The allowed sub-properties of the object can be determined by the creator of the class of objects, by the owner of the object, or by consensus among the NFT and/or Blockchain market (Metaverse) in which the object exists.

Components that are shareable allow NFTs to represent non-exclusive behaviors. A work of art can be loaned to a museum, giving the museum the limited rights to exhibit the work of art, and everyone who enters the exhibition gallery of the piece of art is granted the limited rights to interact with the artwork without the other rights of ownership. A hotel guest is granted the limited rights to use the contents of a hotel room represented by an NFT, which is a fraction of the hotel, without owning a fraction of the hotel and all of the devolved benefits, liabilities, and responsibilities.

The NFTs on the Blockchain represent the state of ownership of objects or components of objects. The Blockchain is updated when a transition of ownership occurs, but the arbitrarily complex object represented by the NFT can be acted upon in ways that don’t change ownership and without an action that triggers an event on the Blockchain. An agent or entity can inquire of the Metaverse to materialize an arbitrary view of the object, and multiple agents can observe different aspects, characteristics, and granulatiries of the object simultaneously. For example, one person in an art gallery can view an entire painting while another person examines a specific brush stroke of the same painting.

This behavior of multiple views that hypothetically could result in a transition can be expanded as a method of optimization where the Metaverse can proactively allow multiple agents to propose an action on an object that would cause a change in ownership of the object. If the actions are not mutually-exclusive, any or all eventually can complete. If any of the actions are mutually-exclusive, then the object must conform to the “laws of nature” for that Metaverse and only one action succeeds. In a large, distributed Metaverse environment, this permits speculative actions concurrently proposed by many agents with the hope of non-conflicting success instead of serializing the activities of the agents, which makes the entire Metaverse less scalable and less responsive. Examples of this include an e-commerce purchase where the online vendor speculates that an item with limited supply remains in stock and available until the moment of purchase, when database ACID properties must be applied so that the transactions are self-consistent in the ledger.

The human perception of the environment requires an observer. Computer vision needs an embodied observer to interpret its input. Some optical illusions rely on human assumptions about the geometry and composition of the real world mapped to our visual perception. Each person applies his or her own attention and focus to perceive the world differently, from his or her own perspective. The Metaverse similarly needs a mechanism to integrate and record the multitude of individual perceptions of objects. The objective reality is one representation of the object, but each individual may need to perceive and interact with a unique, private aspect of the same object, with more or less granularity, depending on his or her attention, biases, and actions. The Blockchain for the Metaverse is providing the underlying information (objective truth) for a multi-agent simulation where each agent may require a different view or aspect, i.e., a different granularity of the data. Some agent inquiries and actions refer to the composited object and some agent inquiries and actions require the individual components of the object or a composite of multiple objects.

Even when the object cannot or should not be reconstituted, the Metaverse and Blockchain network can maintain a cache of the lower-granularity view constructed while proactively scanning for fragments of objects that could be merged. The presentation to the user may correspond to a different configuration and composition than the object or objects represented by the NFTs. The implementation of a Metaverse as NFTs on a Blockchain must continually balance the amount of granularity of an object represented on the Blockchain versus the amount of granularity encapsulated within the object. A single object in the Multiverse could be represented as a composite of multiple NFTs or an internally granular and complicated object could be represented as a single NFT. Depending on the actions or transformations on the object, the ownership, the history of the object, and any proactive scavenging, each object can have an arbitrarily complicated relationship with the NFTs associated with it. The relationship between the representation or materialization of objects and the NFTs on the Blockchain must dynamically adapt to the ownership and the actions being performed; it’s not always a one-to-one mapping.

With the ability to exchange and/or replace tokens based on the mutability of the underlying object (fusion and fission), it is computationally more efficient for the Metaverse to proactively scavenge and/or reap objects whose underlying representation is fragmented (individual components unlikely to be used individually in the near future or separate ownership no longer relevant). Each NFT should correspond to the maximal complete subgraph of the components of the object that is necessary and sufficient for the operation to be performed on the object and the ownership of the components.

This capability of the Metaverse provides an important motivation to incorporate AI into the Blockchain, NFTs, Smart Contracts and the Metaverse. It is impractical to predefine all transitions and equally impractical to request the intervention of a human expert for all transition. The mechanism for determining the outcome of the NFT Smart Contracts needs to scale with the number of objects while providing “answers” in a timely manner to maintain the transaction velocity of the Metaverse. This can be an important use case for Neuro-symbolic AI that is able to reason about the objects in the Metaverse, their behaviors and the requested transitions. It needs both the knowledge base of “common sense” about the objects in the Metaverse and also needs to understand the transitions that are attempted so that it may successfully navigate the requests without damaging the value and consistency of the particular Metaverse in which the objects are represented.

The Blockchain will track the history and origins of the components, but the linear ledger nature of the Blockchain introduces some challenges. Incrementally appending and merging each component scales with the number of components, which is expensive at fine granularity. Building up a complicated object by hierarchically merging pairs of objects remains expensive and is expensive to search if the history must be analyzed. An efficient representation requires an NFT token that can represent a hierarchical merge that is equivalent to the hierarchical graph of the components of the object itself.

As NFTs and the Metaverse confront the complexities of representing real world objects and the inherent philosophical paradoxes of reality, NFTs must incorporate transformations that mediate between NFTs and the metamorphosing objects that they represent. Smart Contracts or other algorithms and characteristics associated with the NFT that allow an NFT to be replaced by another NFT representing the fission or fusion result of such a transformation on demand, when the object is required to mutate in a manner, is an efficient and scalable solution. This approach will allow NFTs to efficiently represent the hierarchical graph of components of an object and the complex set of operations and transformations that can be performed on the object at any level of granularity permitted by the Metaverse in which it is embedded.

The complicated relationship between composited objects in the Metaverse and the NFTs representing the objects on the Blockchain opens significant and exciting opportunities for additional innovation in this ecosystem. Let’s build some ships!

[1] 1 mole = 6.022 x 10**23 elementary entities.

[2] ETH EIP 864 Divisible non-fungible tokens.

[3] ETH EIP 998 Composable non-fungible tokens.

[4] ETH EIP 1634 Re-fungible tokens.

[5] Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks. Chainlink Labs. https://chainlinklabs.com/

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@edelsohn I wanted to thank you for posting one of the most interesting discussion posts I’ve seen on this site! During our Monday morning meeting you mentioned some of shortcomings of NFTs as they’re currently defined in the Ethereum ecosystem, problems with lending, problems with provenance. Could some of the metaphysics of NFTs be solved by simply changing the NFT framework or creating a new version of them that makes these issues easier to solve?

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Thanks for your kind words. Glad to launch the conversation. I hope to find other researchers who would like to collaborate and explore the solutions to these issues.

I proposed a solution that leverages the existing design and concept of NFTs, through expansion of the role of smart contracts and oracles. Basically, one continues to create and destroy NFTs, but more rapidly and dynamically as their components change in ways that cannot be represented by dNFTs, e.g., changes to the data of the NFT without change in ownership or tracking the disposition of the sub-components that changed.

NFTs are immutable. That’s a fundamental principle. There is no new version of NFTs that can change that concept. Objects in the real world are continuously changing. It’s Heraclitus again: “No man ever steps in the same river twice , for it’s not the same river and he’s not the same man.” At what point does the NFT have to represent that a change has occurred? The NFT of the river or the NFT of the man has a temporal component, but it’s impractical to create and destroy NFTs for each object on an infinitesimal timescale. So when do you do it? When it matters, when it’s observable.

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At @dwither @Fizzymidas – I would love to hear what you think about some of this discussion of the metaphysics of NFTs from the perspective of presistent soulbound tokens – any possible connections between them? @cipherix what do you think about this, you certainly have the widest range of experience with crypto data objects of anyone I know on this forum?

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And of course @Larry_Bates – I’m sure you have some ideas about this as well! (I just saw your like)

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I have been thinking about this post to wrap my head around it before I post a response! There is a lot to unpack here!

It has made me revisit the concept of “what type of digital uniqueness is necessary vs. simply a novelty?”

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I’m adding my praise to @jmcgirk’s appreciation of this essay, and focusing on the implied analogy to 3D (i.e., video games) because that helped me understand the point you’re making.

If you’re portraying a rocket ship approaching a planet, a very complex model is wasteful when the planet is very far away (from the camera) and the viewer can’t perceive the complexity. As the viewer (the camera) gets closer to the planet, the original model (perhaps only hundreds of polygons) needs to increase to thousands and then tens of thousands of polygons to faithfully reproduce the “reality” of the planet at high granularity.

In 3D, the illusion of “closer” and “farther away” are the result of where the camera is located and how much light is falling on the object. (Standing on a planet in complete darkness requires zero polygons.)

I wonder how useful “proximity” and “illumination” might be to your explicit analogy of replacing all the boards in a ship (or all the cells in a living thing). When we meet a year after our first meeting, I’m clearly the same person I was a year ago, yet I look older, and my doctor (using the proper camera and illumination) may find something undesirable growing inside me that wasn’t there before.

As a side note, this also reminds me somewhat of the work of Italian roboticist and philosopher Riccardo Manzotti (The Spread Mind and Dialogues on Consciousness) who asserts that consciousness is not in our minds at all but in the world, and thus when we look at a star many light years away, our “spread mind” is literally encompassing that distance.

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Thanks for the thoughtful reply.

The object itself changes and the perception of the object varies among observers.

Most of us perceive stars in the same manner. But now with the Hubble Space Telescope or the new Webb Telescope, a few of us have a more detailed perception. That difference probably doesn’t matter for a star, but it may matter for my view of the front of a car versus your view of the back of the same car. It’s the same car – the same object, the same NFT – but the perceptions – observation embedded in a viewer – can have implications to the operations on the NFT.

You also raised the issue that you are the same person a year later but that the cells in your body have changed. Some hair fell out and our hair is a little more grey than last year. Those changes might not be important and could be represented as data changes to a dNFT, but if we are celebrities, a fan might want a piece of our hair. In the latter circumstance, the hair and its origin matter. The hair is not new, it came from you, so it is not appropriate to materialize a new NFT from scratch. Instead, one should bifurcate your NFT into two NFTs: one of you without the hair and another of the hair. Then someone can obtain the NFT corresponding to the hair.

And this again highlights perception. Maybe some people are interested in the hair and others are not. And maybe some people pick up the hair and examine it or some fans fight over it. The state and disposition of the NFT varies among observers, and there are periods of time when the Blockchain network / Metaverse may speculatively allow some observers to perceive and experience changes to the NFT that have not been committed to the network.

All of the metaphysical questions about identity, observability and consciousness come into play. The Metaverse must confront these questions, even if the developers don’t yet realize it.

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Firstly, I’d like to echo the others and say that this is a fascinating post @edelsohn.

As I was reading through, the first thought that came to my mind was dynamic NFTs, which Chainlink has been enabling: What Is a Dynamic NFT? | Chainlink Blog. This is just a component of what you are articulating here, but it is an example of how an NFT might change and adapt, while still remaining the same NFT.

Broadly speaking, I recognise the problem you describe in this post and agree with the direction you propose when it comes to a solution. I have been thinking along similar lines but in different contexts – my own area of expertise focuses on people, rather than objects, but I think many of the same principles apply. I especially appreciate the emphasis you place on the importance of observation as well as perspective. Overall, I think that at a theoretical level all of this makes sense, however, the real challenge will be in how this translates from theory into reality.

When thinking about how I might add value to this post, I thought it might be useful to analyse the similarities (as @jmcgirk noted), between this discussion and one we are also having about soulbound NFTs as a way to capture and use identity on the blockchain (Discussion Post: Are Soulbound Tokens the best way to create a trusted layer on the blockchain?). I think this serves as a good practical example of the challenges you are talking about, except that it focuses on how to represent people on the blockchain, rather than objects, meaning that we talk about an NFT that changes with the object (person) it represents.

A ‘soulbound NFT’ can generally be described as a framework for attestations that encapsulates the digital representation of a person on the blockchain. A key problem is that we must establish both the identity of the person, as well as attributes about that person that are both objective and subjective and relate to social, human, and financial capital. Most importantly, these attributes will change over time. To do this, we need an oracle and smart contracts to create, maintain, and update attestations. An oracle can attest to a person’s real identity using existing government documents such as a passport or driver’s license, and other objective factors such as qualifications and income etc. However, when it comes to subjective attestations (see Kate Sills critique of soulbound NFTs), secure smart contracts can provide a credibly neutral mechanism by which people can make attestations about each other.

Do you think that soulbound NFTs, when described like this, provide a practical example of the problems and solutions you describe? There is more depth to your analysis, but I think it maps into this context pretty well.

I also have a few questions/comments about the key points you made.

  • An object represented in the Metaverse must be arbitrarily and dynamically divisible or fusible with other objects on demand, as determined by the “laws of nature” in which the object exists in the respective Metaverse.

I am interested in why you choose to use the words ‘divisible’ or ‘fusible’ here. This may simply be a product of different backgrounds, but the words I would lean to are adaptable and transformable. Perhaps this is just semantics, or am I not fully understanding what you mean? I think the core concept you are getting at here, is that the NFT which represents an object must be able to change (adapt or transform) in accordance with both the object it represents in the real world, and according the “laws of nature” on the blockchain.

I think we could also have a discussion about how we define the laws of nature in this context, as they are presumably determined by people, and therefore driven by social consensus, rather than us discovering them through trial and error such as in the real world. In this sense, there are limitations to analogies between the metaverse (something we create) and the real world (something we exist in, and discover things about).

  • NFTs should be created and correspond to the coarsest granularity that represents the object and its ownership necessary for the required, observable action.

I particularly like how this principle maps onto the people side of things, as I think it could be used for privacy related purposes which are a huge challenge. “An attestation about a person should be created and correspond to the coarsest granularity that represents what is being attested to, and its ownership necessary for the required, observable action.”

  • The relationship between the representation or materialization of objects and the NFTs on the Blockchain must dynamically adapt to the ownership and the actions being performed; it’s not always a one-to-one mapping.
  • Each NFT should correspond to the maximal complete subgraph of the components of the object that is necessary and sufficient for the operation to be performed on the object and the ownership of the components.

I am intrigued by the tension between representing the ship of Theseus as a single NFT on the blockchain, or representing each plank of wood as an NFT, and the ship itself becomes a composite of those NFTs. Do we then also represent the trees that are cut down to create the wood as NFTs? Would this NFT be destroyed or transformed during this process? This could be an interesting way to systemically account for previously ignored externalities.

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Thanks for your great comments and insights. You raise important points about identity and attributes.

Soulbound NFTs definitely are an aspect of the issue. I don’t know if they are the correct solution.

I believe that identities need to provide a capabilities-based system. A person has various characteristics and capabilities. Some of these are inherent, like a person’s DNA, but some are capabilities that they have gained, such as access to a bank account or a car or a house or a SCFR forum account. Instead of “this person has permission to do X”, a better model is “this person has the capability to do X”. Then the capability can be transferred or copied or rented. A person could delegate (copy) capabilities for certain financial activities to a business manager or accountant.

I imagine the example of someone invited to a business luncheon and allowed to bring a guest. Ignoring issues like security pre-screening, the person could show up with the guest. The guest does not need separate permission to attend the luncheon. The guest does not need a separate invitation or a separate listing on the guest list. The person who was invited has the capability to bring himself and a second person. That is an attribute (capability) added to the person. And at the business luncheon, the identity of the person who brought the guest is important. It’s like degrees of connection on LinkedIn, fundamental to psychology and persuasion, and the reason that warm introductions are important: the title and history of the individual establishes a bias for the guest (or maybe vice versa). This aspect of identity and transferrable “trust” (for lack of a better term) needs to be represented and actionable through identities depicted as NFTs.

In regard to “divisible” and “fusible” versus “adaptable” and “transformable”, I am trying to distinguish between data that changes within an NFT (dNFT) to represent the change to an object and components of NFTs that change ownership. As I described in the post, if I have an NFT for a collectible shirt and give someone a button from the shirt to replace a broken button in their shirt, it’s not a fungible button. It’s not simply a button moving from one shirt to another. The NFT for the original shirt no longer correctly represents the shirt. The initial shirt now is a shirt with one less button. And the second shirt now is a shirt with a foreign button from the first shirt. The two original NFTs have changed in ways that should be tracked.

I propose that they should be tracked as operations on the Blockchain, not solely internal to the data of the NFT (dNFT). The original NFT should be destroyed, under control of a smart contract, and replaced with two NFTs for the initial shirt without the button and a separate button. That is what I mean by divisibility of the NFT: one NFT transformed into two NFTs based on the “laws of nature” (not a shirt and a bar of gold). And the second shirt incorporates the button through fusion, under control of a smart contract.

My reference to granularity of the NFT is trying to express that one could maintain a composite NFT of a shirt without its original button and a button obtained from another shirt, or one could proactively scavenge the extra complexity of two NFTs and replace it with yet a newer, single NFT that represents the composite object of the second shirt with the foreign button.

And your final comment about trees cut down to create the planks is exactly correct. I propose a mechanism that avoids tracking every molecule or atom or quark as a separate NFT and compositing them together. To start at an arbitrary point, one cuts down a tree (NFT), now there is a stump (NFT) and a trunk (NFT) and branches (NFTs). The trunk is cut into planks (NFTs). The planks are treated and processed and eventually construct a ship (NFT) or a house (NFT). At various points in time it is a tree, then a trunk, then planks, then a ship.

Or consider vegetables farmed and eventually used in a salad. Is it vegan? Was it harvested on a fair-trade farm? Was the vegetable later discovered to be contaminated with E. Coli or Listeria?

Or steel girders in a bridge. Did the steel contain defects?

Depending on the context and the individual, one may care about the tree, the planks, the ship, the house. When is the house NFT a single NFT and when does it need to be the components? I refer to arbitrarily and dynamically divisible and fusible because if I purchase a ship or a house or a salad or a bridge, I interact with the object at the coarsest granularity until something forces a finer granularity.

This is related to attention in human consciousness and perception. The human brain would be overwhelmed if it tracked all of the detail of all senses. Most information is filtered out. But in a particular circumstance and task, the brain focuses on the additional information from particular sense. I propose that NFTs and the Metaverse must operate in a similar manner to avoid overwhelming the Blockchain networks in ways that are not scalable.

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@dwither How would you envision the transactions operating solely through dNFTs?

For example, tree to trunk to planks to ship. On which, single NFT would one attach the transformed data? One might not know that the tree will be used to construct a ship when the tree is felled, and one may not know about the future disposition of the planks from the ship. Maybe the ship participates in a famous event and the wood is reused.

For example, the UK Diamond Jubilee State Coach includes fragments of Henry VIII’s warship, the Mary Rose, and Lord Nelson’s ship, the Victory, as well as pieces of wood from Westminster Abbey, St Paul’s Cathedral, Kensington Palace, and even a supposed piece of Sir Isaac Newton’s apple tree. But it also contains modern history in the form of wood from the royal yacht Britannia. How would one preemptively know that fragments would be reused?

Yes, dNFT allows one to modify the object, but if one transfers components of the original object, one needs to be able to dynamically specify the components and declare some NFT to which one attaches the results. One can create a new dNFT and modify the object that it represents, but it’s still a new NFT.

I’m curious about the semantics of adapt and transform in this context.

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Thanks for the thoughtful answer, and especially for linking it to specific NFT examples.

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I’ve been traveling recently, so just catching up - we’re largely on the same page here.

I see transactions as occurring both intrinsically through and extrinsically around dNFTs. The distinction you make between divisible and fusible is much clearer when considering objects, especially the examples you provide. The problem is less clear when considering identity (which is my main focus), but still relevant now that I think through the problem. I would describe adaptation as change within an NFT, and transformation as the changing of that NFT. It’s definitely semantics, but in this sense it could be seen that the original NFT isn’t destroyed when it is turned into others (tree into stump + planks etc), rather it is transformed into them, but the linkages/history remain. This is true regardless of labels, I’m just more familiar with adaptation and transformation as concepts and so gravitated towards them. Do you have any thoughts about what the first use case for these types of NFTs might be? I can see the purpose in the big picture, but where might the initial product market fit be?

There is another layer to this. Depicting objects on the blockchain is important, but often the relationship between two objects is more important than either object individually. For example, in a post disaster context, one of the best predictors for good outcomes during response activities is a strong connection/relationship between the emergent community response and the institutional response. The capabilities of those groups in isolation is less important than they are combined. Consider a rural community affected by a large magnitude earthquake, the institutional response has the necessary resources (engineering equipment, food, water etc) but does not understand the local context and how to best utilise it. The emergent community response has the correct granularity when it comes to understanding which infrastructure needs priority repairs, who needs help, where food shortages are etc. This type of connection can be described as linking social capital (eg https://journals.sagepub.com/doi/abs/10.1177/0002764214550299), and where it is present there are generally better outcomes, and where it is not, generally worse outcomes.

Representing these types of relationships on a blockchain is difficult. My initial thoughts are that for the above context you would want to create a role (NFT?) for each party which have a formal relationship, the institutional response would be clearly labelled and predetermined and likely be adaptable/fusible. However, it’s almost impossible to pre-determine who or how many will lead a community response, as it’s emergent. In this context the role (NFT) for the community response would have to be open with a call for volunteers who could step up and interact with the responders through this type of framework. This second NFT would likely need the capability to transform or divide as the response progressed and volunteers changed. This example only really works in this context, however, and a wider framework to account for different contexts would be required. Do you have any thoughts about how to represent these types of relationships between NFTs on the blockchain?

With regards to your previous post I agree that identity needs to provide a capabilities-based systems, and this is one of the problems I am thinking through. Who decides who has what capabilities in what contexts? How do we ensure that the granting of capabilities is not abused for personal gain? Inherent capabilities which can be objectively determined can be relatively easy in certain contexts, but subjective ones (such as those often based in social and human capital) can get tricky. There are significant implications for power relationships here, and the problem is not limited to people – Goodhart’s Law (when a measure becomes a target, it ceases to be a good measure) becomes relevant. This is veering off into the oracle problem though, and away from the metaphysics of NFTs. One area where NFTs can be useful in this context, however, is tracking history or reputation of particular vendors, but it requires being able to effectively measure what is being optimised for. For example, it’s quite difficult to determine if produce is fair trade or organic ex-post facto.

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I envisioned the history on the Blockchain, not within the NFT. NFT-1 is destroyed (burned) and NFT-2 and NFT-3 are created (minted) to replace it.

I complete agree with your comment that relationships are important. I was trying to allude to that with the statements about proactively scavenging NFTs and about observers. In regard to your emergency response example, in one context its a rescue team, in another its the community team and institutional team, and yet another are the individual people, to pick some arbitrary “resolutions”. In the Metaverse, different activities would interact with the entities at different resolutions. Does one provide the rescue equipment to one of the representations of the team or to an individual?

In regard to the representation, EIP 998 already describes composable NFTs, which addresses at least part of the relationship. There is a very interest, unresolved problem of the interaction between the NFT “objective truth” of the “world” and the lower-granularity “views” depending on the observer. This could be a great research topic.

How this environment is implemented through Oracles is a fundamental question. The Oracles are intimately tied to the metaphysics.

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I see this more as an accountability function. Where does the equipment/resources go, and for what purpose? The idea would be for the blockchain to mirror the real world as far as practical, to provide ease for retrospective analysis as to how resources were used, and whether lessons can be learned for next time. Otherwise there would not be much use in putting this onchain.

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Consider: that was the rescue plane flown by Jimmy Stewart or Harrison Ford or Prince William.

Also, consider a completely virtual world, not only digital twins. In a solely digital representation (“game”), the Blockchain is the only representation of the disposition of the objects. If the Metaverse game represents a disaster and rescue, all of the participants and objects are NFTs on a Blockchain.

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@dwither First use is the million dollar question. History implies military or “entertainment”. So far, artists and creatives are early adopters of NFT technology. They are trying to monetize their abilities in the new gig economy and have greater psychological trait openness.

As art NFTs evolve from static or animated images to audio, video, AR, VR, MR, XR, etc. one can envision editing the material represented as NFTs. Consider a TikTok creator who records lots of raw footage for potential clips, followers invest in the raw footage as NFTs to fund the creator, and the footage is edited together into clips. Plus there is the question of how media represented as NFTs relates to music and video rights management (mechanical rights, performance rights, synchronization rights, broadcast rights).

The financial opportunity will take another leap when this model is applied to assets like real estate, energy, food, and healthcare. Just as with PC-native generation, Internet-native generation, Social Media-native generation, the Blockchain-native generation will bring a much different attitude and be much more comfortable with Blockchain as the basis for all transactions.

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Thanks for your thoughts on first use. It will be interesting to see where the blockchain-native generation takes things.

Exactly, this is why I am so interested in identity, and how it is represented on the blockchain. Both the subject and the object are important, but we seem to focus on one or the other, when a structured approach to both is necessary to achieve desired outcomes.

Additionally, borrowing from Daniel Kahneman’s ‘what you see is all there is’ cognitive bias, if we only partially represent reality, then we are cognitively biased to ignore what isn’t represented. This comes back to the importance of observation that you mentioned in the first post - what do we see, and what do we not see? The second question is harder to answer, but no less important.

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Blockchain and NFTs are going to get into everything. When you ask First Use, part of the confusion is First Use in what sense?

copper.co already is being deployed by State Street. Metaco already is being deployed by Citi, BNP Paribas, DBS, BBVA, Societe General Forge. But that’s for traditional settlement and custody.

Animoca and its subsidiaries is deploying it in gaming.

My curiosity is the novel, future deployments and applications driven by the Blockchain solutions to these metaphysics paradoxes.

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I can imagine Rolex creating NFTs out of every single component of a watch or an airplane manufacturer doing so for safety reasons. Actually I wonder if Toyota is up to something similar – they’re really pushing “Keep your Toyota a Toyota” with their OEM parts. I guess the blockchain would be the next step. You can scanning the car’s wallet and reading that it’s 95% intact or something like that.

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