Discussion Post: The Metaphysics of NFTs

Medical device and pharmaceutical manufacturers already are looking at Blockchain to prevent counterfeit products. Knock-off drugs and non-medical-grade devices is a big problem.

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Thank you so much for this post! I am extremely excited by the concept raised in the original post. The idea of discussing the Metaphysics of NFTs is one that is useful to pull the concept away from any specific protocol to be able to discuss the possibilities and merits of the abstract idea of an NFT without picking on or promoting any particular NFT protocol. In that context, it seems that we have been discussing the physical limitations that bind the NFTs; or in other words what are the physics behind the finite boundaries that an abstract NFT will still be affecting the transmission, preservation, or destruction of an NFT. While not exhaustive, I have identified some finite boundaries that can be discussed to bring the abstract concept of an NFT to all its pain points to then start to understand where it can and should attempt to overcome these limitations.

The Physics of Gaming, Gamification, and Meta-gaming

The Physics of Extracted Value

The Physics of Emergent Value

The Physics of Identity

The Physics of Gaming Economies

The Physics of Real-World Economies Exchanging Digital Goods for Tangible Objects

The Physics of Reaction vs. Interaction

The Physics of Analyzing Emergent Action vs. Planned Action

The Physics of Observation

The Physics of Digitizing Real-World Objects

Interactive vs. Reactive

While the general discussion around NFTs and blockchain-based databases has tended to use “immutability” in the most literal sense; Object-Oriented Programming has multiple types of immutability. Without going into too much detail within this post, a few different types of immutability include: Realio-trulio, write-once, popsicle, shallow v. deep, observational, and immutable facades. On the one hand, “immutability” in those contexts usually is conditional in that there may be at least one administrator with the capacity to unlock an object to put it into a mutable state.

With the understanding that there is no single type of immutability, it should be important to indicate that a “mutable” object is “interactive” in the sense that it allows an individual to modify the code on the back end from a front-end interface. This is in contrast to an object that is “reactive,”on the front end which is an object that although interaction takes place, no interactions will modify any back-end coding. While these contextual definitions of reactive vs. interactive are not completely prescriptive, they are meant to give a reference for a situation that allows the back-end state of an object to be modified by a front-end user.

World of Warcraft is one of the most famous examples of a front-end UX that allows users to modify or lock objects which then modifies the code-base of the game to reflect these changes. It is this concept of front-end user modification of back-end objects that is the underlying principle of the “Soul-Bound Token” concept. As World of Warcraft was not the first game to utilize this approach to allowing users to modify codebase with in-game interactions, it should be noted that this type of approach to gaming is not ubiquitous even in the MMO/MMORPG setting. For various reasons, the types of games will largely determine whether a company runs its own servers, leaves the server maintenance to the communities, or attempts to create instance-based objects that do not require as much server overhead.

To get further into the physics of gaming without going to deep into this specific area; the type of game, number of players, and concurrence of play will largely determine the physical infrastructure needs of a game. By proxy, the infrastructure needs will become that game’s infrastructure limitations. The physical infrastructure needs of an open world game will be drastically different from the needs of a platformer or level-based game if the open-world is being shared online, and more specifically if objects are interactive. Conversely, a reactive game which does not allow multiple users to share access to interactive objects or have shared experiences requires much less physical infrastructure to permit the aforementioned shared experiences. The design mechanism that differentiates these needs ultimately comes down to what is known as the view frustum.

While a complete landscape exists, a single player open-world game will still only render the frames within the view frustum. In some cases like virtual reality, the view frustum will be extended a frame beyond the player’s visibility to prevent visible screen-tearing; but this is usually the limit of what is being rendered at any given time for a one-player experience. This ultimately comes down to the developers wanting to create the best experience for the user. While it may be possible to load the entire map all at once, that type of stress on hardware creates an experience for the user that may not be the best possible outcome, especially in the context of a solution like frustum culling reducing the hardware overhead.

Often, when the hardware is overloaded due to a developer trying to load too much information; the user experience will start to suffer in unexpected ways such as the road disappearing from the above map. The view frustum will follow the user’s vision like the video in this link when a developer has effectively optimized the codebase to improve the user experience as much as possible.

While these limitations are clearly present, it does not prevent research into continuous rendering from moving forward. There is a specific need for continuous mapping for industries that are monitoring GIS-based objects, such as aviation, shipping lanes, or autonomous vehicles. This research has similar physical limitations to MMORPGS, and in that context will offload hardware processing into server centers or powerful computing clusters as not to require individuals to carry the hardware load for the global operation. In each case, a black-box type object is still necessary to record individual object activity to relay it to the data-processing centers. In this example, the objects moving are being tracked while also tracking other activity within the global landscape to ensure the objects can move without impediment. Currently, one of the most efficient and effective methods of mapping real-world objects is laser-scanning. While there are multiple methods of digitizing real-world objects; light or laser-based mapping methods have become the most viable for situations that need quick reaction times. Regardless of the method of digitizing the real-world object; the energy requirement will never reach 0 and is asymptotic in the best-case scenario if we look at our current technological limitations. Additionally, if we assume the best conditions for hardware efficiency and effectiveness the energy cost of rendering will never reach 0 and will also be asymptotic in the best-case scenario.

One other important limitation to discuss is the concept of extracted value vs. emergent value. If we look at World of Warcraft as an example, the gold-farming that occurred in game had emergent value in the real-world for people who did not want to put time in within the game world and used real-world money to speed up their leveling progress. Since this practice was technically not permitted, malicious actors moved into the space and began to extract as much value from gold-farming as they could with no mind to the implications for the other players. While many players did not approve of this behavior, those looking to extract value persisted with the gold-farming and were able to generate significant real-world economies around the virtual exchange.

The ethics of the gold-farmers was always a major point of contention within the community, with one side asserting that practice should include such punishment as being permanently banned, having your IP address banned, losing all items associated with the character, and not having the capacity to reclaim any items from an account that was known to have participated in gold farming. The issue was that Blizzard explicitly stated that the practice of selling gold for real-world money is not allowed and their EULA permits Blizzard to take action against anyone discovered to be participating in the practice. It may be this conflict of emergent value, extracted value, and illicit value that makes World of Warcraft frequently a point of academic examination or framework extraction.

With all that said in the context of the original poster pointing out that if an object is meant to reflect a real-world object; it necessarily must be able to reflect the changes of that real-world object. Immutable objects within computer science are generally mutable once an administrator has unlocked the object, or in some cases an object cannot be unlocked and goes out of usage once it no longer reflects useful information.

“Bates emphasizes that Blockchain is not needed in every part of the economy. He notes that SQL works better than Blockchain for many business operations, in which case he says that the community is getting closer to the real use cases that make sense in the real world as all of the hype is fizzling for good data.”

For many years, I have been advocating for using SQL in situations where long-term immutability is not necessary or even desirable. While computer science, gaming, and telecommunications move towards more energy-efficient methods, the notion of an immutable object in the form of an NFT becomes less feasible when the physics of digitizing real-world information and keeping that information up-to-date is taken into account. This is where the discussion should acknowledge that development will not cease; so how do we advocate for the most salient implementations?

Considering the comments in the thread that have been made so far, I can conceptualize organizations like the FAA or any other transportation monitoring to utilize systems that attempt to create immutable activity histories. Considering black-boxes are already being used in planes while COBOL is being utilized as a form of security through obscurity; some sort of NFT-based tracking system would clearly be the most pressing application of the abstract energy-efficient NFT. I am very much excited by this post, as it lays out a philosophical basis for moving away from the notion that “everything should have an immutable history”. Not only does that not seem feasible, video game design would point us towards only rendering what is useful when it is necessary.

Edit: I tried to keep this as brief as possible. The last time I was this inspired by a blog post, I literally wrote a book in response :slight_smile:

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I think it’s relevant to note that Binance and UEFA just announced they are testing NFT-based tickets to combat counterfeit tickets specifically. I think that is in line with the general ideas that have emerged within this thread.

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Hi, Larry. Thanks for your great comments and continuing the conversation.

NFTs are the information on the Blockchain and the data associated with the NFT. The data for the NFT could be on a separate server, in IPFS, or embedded in the Blockchain information itself. The portion of the NFT committed to the Blockchain is truly (realio-trulio) immutable; the data referenced by the NFT is off chain and inherently mutable, although supposedly it should be mutable. In some ways, that’s another can of worms. I am starting from the position that NFTs are intended to be truly immutable and that changes need to be explicit. I am asserting that not only must ownership transitions of complete NFTs be represented on the chain, but transitions of arbitrary components of an NFT must be represented on the chain.

Dynamic NFTs (dNFTs) explicitly are intended to be mutable with an explicit definition of how the data can be modified.

And your expansion of the conversation about MMOs is exactly right. In the latter part of my post I was trying to raise the exact challenge that the Blockchain represents objective reality but the Metaverse is going to have multiple agents all viewing representations of the world represented by NFTs on the Blockchain. Those agents are viewers are going to require different views, different obscured information, different resolution, etc.

Consider someone who goes into a spice shop, scoops out some spice to inspect the quality, and then pours it back into the bin. If the spice is tracked as an NFT on the Blockchain, is that quantity transferred to the customer and then returned to the store? Does someone outside the store need to know about that transfer? If there are multiple customers in the virtual store, do they all need to know about the transfer? Ultimately if the virtual store has 2 pounds of a spice that represents a digital twin and both customer want 2 pounds, there is a conflict. But until the actual sale, both customers can consider purchasing 2 pounds of spice.

Or think about Fractional Reserve Banking. Banks hold 10% reserve and lend 90%. If everyone demanded their money from the bank simultaneously, the bank could not deliver it. But each person sees their full balance in their account. Which is the reality? The central banks of the world only allow cryptocurrencies to exist because they are not allowed to implement fractional reserve banking(!), but eventually this must be represented.

NFTs need to address embodiment, granularity and multi-agent views.

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Thanks for the additional perspective and thoughts. What do the phrases “lock-in substance encounters” and “irregularity calculation” mean in this context?

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The idea I was attempting to convey in this context is that obtaining an NFT might be simpler than dispersing it. The market distribution is impacted because although some NFT holders find it simple to sell, others find it difficult to sell off and exchange, and they end up keeping their NFT locked in their wallets where they essentially become useless. Additionally, while there is an irregularity in the distribution of NFTs, this is also because each NFT holder has the ability to list their NFT for sale at a different price when compared to other coins and tokens, such as Bitcoin, where everyone uses the same price, but you’d see some NFT descriptions like "this NFT should be listed at a price worth 1 ETH+ (and some later sell at $10 due to the difficult in the sale, lol never constant) According to Mauro Martino it’s said that On OpenSea, 75 percent of NFTs that sell at all go for less than $15, while the majority never sell in the first place. Only 1 percent traded above $1,500. “It’s very clear that very few people can really go over $1,500 in selling,”

NFTs are their own market. They have their own, inherent value and price irrespective of the cost of the underlying token and coin.

The market forces for the price of NFTs and the independent pricing behavior of the various constituents and costs of producing NFTs are interesting topics, but what does this have to do with the discussion topic of The Metaphysics of NFTs?

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Well thanks for explaining, I’m only giving my own view of the philosophy of NFT’s & some faults I see.

Great topic @edelsohn but can you please breakdown this topic or probably summarize, I’m really interested in understanding it, cause I’m halfway into it.

The original topic or the topic raised by Freakytainment?

The pricing of NFTs and the multiple forces affecting the NFT market is very interesting and good topic. It would be best to start a new Discussion Post for the topic. This forum primarily is focused on Smart Contracts, not the general concept of NFT markets. I’m unsure how much the moderators wish to limit the topics.

There was initially discussion among the moderators if the comments had started to get too off-topic, but in the spirit of not stifling conversation, there was a decision to let the thread naturally progress and not interfere. As was pointed out, the discussion of NFT pricing and value would warrant its own separate thread. While the moderators definitely are here to ensure a thread stays on track, it will depend upon each unique situation as to whether the mods step in or not. I sincerely appreciate all the effort by community members to keep the conversation at the highest quality possible!

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Yeah @Larry_Bates I agree, really appreciate your efforts and the effort of all mods here, I understand y’all want to put everything in check, and that’s why I’m bringing an end to my comment on the NFT discussion on pricing and sale, and I never wanted a continuous discussion looking like an argument, but it’s really good I’m seeing this intervention from you Mr Larry. :hugs:

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