I’ll bite. A winery could sell ownership of wine stored or wine yet to be made. The purchaser, if sold via an NFT, could resell that ownership with no interaction with the winery until claiming the wine at a later date.
This means both parties no longer need any relationship between the initial sale and claiming the eventual goods. The winery will simply be able to wait for someone to return with proof of ownership at a later date.
If the winery gave out certificates or built some app it would need to verify and maintain that. With an NFT there is very little work on their end.
Ultimately this turns these type of products into highly liquid assets. This will greatly increase their value to a potential customer and the initial purchase price. Which will make the winery more money for the wine it sells.
This can effectively be done with anything that can be claimed at a later date after initial purchase.
The question is can you really make it simultaneously cheap to trade and decentralized and always on. Or is the overhead of all that just make blockchain tech very awkward and suboptimal (especially since ultimately there's a centralized winery that honors the "claim" with actual wine - so no real need for decentralization). Instead why not just have a little centralized company that lets companies create ledgers of asset ownership for $300/month. If it's a real use case, any winery can sign up, etc.
Issue is blockchain tech doesn't actually solve anything
Transactions on most L2 chains these days are less than a penny.
There are dozens of popular mobile wallets that make viewing, sending, receiving coins / nfts trivial.
The problem that it solves is that there is no need for you imaginary ledger company to exist at all in a blockchain model, the winery cuts out a rent seeking service and the user gets a more secure and portable product.
Automation isn't just going to hit manual labor, blockchain and web3 will allow for the emergence of fully autonomous "companies" that operate via smart contracts.
Is this secondary market of goods yet to be produced something that people actually want to have?
Today the way this works is usually with a ticket or a receipt. The guy with the email receipt on his phone gets the food he ordered. The guy with the ticket gets into the concert.
There IS a secondary market for event tickets. Legitimate transfers frequently happen everywhere else e-commerce happens. Questionable transfers happen on the street in what I assume is low volume.
I’m not saying blockchain makes this any better, except in one sense: a lot of people with a lot of money are enthusiastic participants. If I had a winery you bet I’d be selling wine future NFTs, just to try and get the price bid up.
That's great! Hey look I would like to send you the rights to my crate of wine. You're the 1000th customer to my site. Or maybe you want to trade it for your in-game weapon. Or I just like you and it's a gift, anonymous internet user.
Of course I could just transfer directly to your Ethereum wallet. But why do that when I could explain you need to sign up to 'winespectator.com', I'll email them to arrange the ownership transfer, and if you're trading that weapon let's both sign up for a pre-agreed escrow service online and pay them a commission to arbitrage. How many forms do we need to fill in, and who is processing that data? I currently own my crate anonymously- only the person who eventually burns the token will need to provide details to the company for delivery.
As always, descriptions like this betray how little engine-peddlers know about horse breeding. Managing a stable has been a thing as long as there's been horses.
> Hey look I would like to send you the rights to my crate of wine.
You truly believe this can't be done without blockchain?
> You're the 1000th customer to my site.
You truly believe you can't track customers without blockchain?
> Or maybe you want to trade me for that in-game weapon.
You truly believe it's impossible to implement in-game trading without blockchain?
> Of course I could just transfer directly to your Ethereum wallet.
The only thing you could transfer is some meaningless numbers. What makes them meaningful is some central, trusted authority that will accept these numbers as proof of something. But then, since you depend on that authority to verify this... you don't need blockchain.
I think instead of reading what I wrote, you read "you need a blockchain to do this".
The anti-blockchain narrative on here is constantly attacking the strawman of "literally everything must be decentralised".
I'm arguing that a decentralised medium of exchange through which separate points of centralisation can interact is still a useful construct.
You're comfortable with your assets being codified in a thousand different databases in a thousand different representations but the concept of having a common database representing them as "meaningless numbers" is suddenly unacceptable.
So... Why did you write it? Of course you don't need blockchains to do this.
To reiterate: The only thing you could transfer is some meaningless numbers. What makes them meaningful is some central, trusted authority that will accept these numbers as proof of something. But then, since you depend on that authority to verify this... you don't need blockchain.
The blockchain facilities standardised transfer across a decentralised medium. I'm not sure how much clearer I can make my point. You could code alternatives to all the use-cases mentioned, but when you have an existing platform on which to interact, why bother? You want the game developers to implement the winery's API?
> The blockchain facilities standardised transfer across a decentralised medium.
It hasn't. It standardised the transfer of otherwise meaningless numbers, that's true.
In order for your winde order to work, a centralised, trusted party has to verify and accept those numbers, and say that, yes, they represent something meaningful to them.
The same goes for every other example. "Want to trade something for an in-game weapon": This only works if that game a) provides means of trading in-game items, b) can verify that a number in the blockchain actually represents an in-game item etc.
Without countless external entities agreeing to and cooperating on the meaning of this data this "standardised transfer" is literally meaningless. And these agreements will go as well as they already do in reality. How does blockchain factor into this?
> if you're trading that weapon let's both sign up for a pre-agreed escrow service online and pay them a commission to arbitrage.
>> The blockchain facilities standardised transfer across a decentralised medium.
>It hasn't. It standardised the transfer of otherwise meaningless numbers, that's true.
Sure, but that alone can have value. The idea being that people have already built entire trading platforms around tokens, fungible or not. Somebody who wants to enable easy trading of some asset (or futures contract or whatever), hoping for improved liquidity, could see using the platforms built for crypto token trading as much easier than trying to build their own exchange. Especially if it is anticipated that physical settlement demands will not be especially common.
To be more concrete: It might be simpler to get your single-vineyard wine futures up and running on crypto than trying to get it listed as a new contract type in a traditional futures exchange.
Now sure, nothing about getting your weird futures contract into some form of widely used exchange requires blockchain technology. It is merely leveraging the existing infrastructure others have already built around crypto.
This is not too dissimilar from the various ways people have found to get say precious metals as listed items on stock exchanges, despite traditional commodity exchanges or brokered OTC trades also existing. Obviously nothing about speculating on (or maintaining market liquidity for) precious metals requires a stock exchange, since we have those other ways of trading. However people have found getting access to the stock trading market to be worthwhile.
Obviously settlement for physical goods is a centralized processes (or possibly a somewhat decentralized process relying on courts and contracts). This is equally true for any exchange, crypto-based or not. The actual order matching process somewhat separate from the settlement process in traditional exchanges too.
I certainly would not argue that similar platforms could be set up not reliant on crypto in any way, and those could be superior (although network effect problem tend to plague attempts to set such things up if any sort of scale is desired). Most crypto stuff is still extremely overhyped, and a lot of interest in crypto seems to stem from crazy speculation, or people trying to avoid their government in some manner. (The latter is not just things like drugs, arm sales, or money laundering. It also includes more innocent reasons like people in countries with failing economies being terrified that their government can just seize the contents of forex accounts, stock exchanges etc, making their attempts to hedge against local economic collapse potentially futile. But governments cannot readily seize crypto wallets the same way, at least not unless you leave your holdings at some exchange.)
Yes. It may have perceived value. I mean, people spend money on useless skins in games, and perceive those as having value.
> Especially if it is anticipated that physical settlement demands will not be especially common.
Of course, you're buying wine futures and you're hoping that no one will demand the actual physical settlement of, you know, delivering you the actual wine. Sure. That's what NFT scam is all about.
> It might be simpler to get your single-vineyard wine futures up and running on crypto than trying to get it listed as a new contract type in a traditional futures exchange.
Call me when
1. might becomes is, and
2. it actually requires blockchain, and
3. has any applicability on the real world (like enforcement of contracts)
> Obviously settlement for physical goods is a centralized processes (or possibly a somewhat decentralized process relying on courts and contracts). This is equally true for any exchange, crypto-based or not.
Your so close to getting it.
> like people in countries with failing economies
I wish crypto-peddlers would stop pushing this extremely stupid narrative.
Ah yes. The market of on-chain assets. Self-reinforcing, self-congratulatory mass speculation and scams. There's an abyss between this, and even wine futures.
The interesting thing is not that you would need a blockchain to trade wine futures — obviously you don’t.
The interesting thing is that if you can sell the futures as (for example) NFTs then you put them into this Wild West of crypto enthusiasts where
1) All kinds of unpredictable things might happen to the token between sale and redemption! And
2) The culture of crypto enthusiasts might very well lead to much higher prices for your wine than people who actually know about wine think it’s worth, cf. Beeple.
Either or both of these things might motivate a winery to give it a shot, tokenize a few thousand future cases of their weakest plonk, and see what happens.
Just because your market works fine without the blockchain doesn’t mean there’s nothing to be gained by trying.
On the other hand, it might be illegal because: alcohol.
You said blockchains are more practical, in the present tense. The evidence strongly suggests that's not true. And there are plenty of reasons to think they will continue to be impractical in the future.
Stock brokers track perfectly the transfer of people rights to stocks millions of times a day without any decentralized ledger. In fact, a SQL DB has worked quite well for many years now.
If the wine cellar wants their customers to trade wine, I'm sure a centralized ledger based on a SQL DB would be much easier and cheaper to implement and scale to millions of transactions.
Yeah, that's surely trustless. And I totally trust the wine company to perpetually maintain and pay for such a thing, and totally not restrict the secondary market as has happened all the time.
> In fact, a SQL DB has worked quite well for many years now.
When you allow people to write their own smart contracts, bugs will happen. This can't be fixed, only dampened with a weakened interface to the blockchain.
When a bug in a smart contract happens you may now have a dispute, across borders, over the intent of the smart contract and the actual behavior.
Can I trade my wine in the weekend? Ah no, sorry, stock market is closed then.
Can I trade my wine at 5pm? Ah no, European wine stock market is closed then.
When you really 'own' the ticket, you can trade it anywhere you want, without being dependent on some exchange that's only open whenever and takes some fixed cut without any competition.
The fact that you can't trade on weekends is not because some technological problem, it's because there's no demand for trading on weekends. Do you think the technology suddenly stops working on weekends?
Yes, this is probably what you'd do in this hypothetical case, and it's hardly unheard of for contracts to be written up with transferability clauses. Given that we exist in a world where digital signatures also exist, it's unlikely to be particularly onerous.
("Continuously" is probably not the right word, unless you are envisioning the rather unlikely case of this transfer happening on an annual basis!)
Sure, or if you're willing to trust an electronic database you can put it in an electronic database. How do you think wholesalers buy and sell wine at the moment?
What happens if the wine goes bad? Who/what arbitrates in that scenario? Because from the winery's perspective, whoever currently holds that contract owes them money for the wine at a fixed price that was determined and sold in the past.
If I hold that contract and have to take delivery of rancid wine instead of fresh wine like I imagined, what's my recourse?
Basically how do you ensure the state of the real-world asset remains fixed throughout the duration of the contract?
In the case of wine, the real-world version of “going bad” is just that it’s not very good. When you bought the future wine, you were betting that it would be very good wine and you could resell it for more. The winery was selling it to you for “cheap(er)” because you assumed that risk.
So for actual wine, right now, you have no recourse: you bought the risk. I don’t think this would be any different with NFT-wine. Now and in the NFT case you already paid the winery, you owe them nothing more.
Now if they cheat and give you water instead of wine… I guess whatever real-world contract says you can exchange this token for wine would say which wine?
Most likely the first N wineries to do this would do it as a publicity stunt, and if it proved useful then there would be some precedent. Much of the wine world operates on reputation and trust.
For the vast majority of physical products that are not like wine: you’d need real-world contracts to back your smart contracts and the latter would only be useful for decentralization of the secondary market.
IIRC with wine futures you have to either collect your wine or pay for its storage, if you abandon it then at some point (per the contract) it belongs to the winery. At least with wine I think there is a lot of precedent here, there are norms you’d want to fit your crypto doings around.
Personally, I don't want the world to go back to "Bearer Bonds", and given they were banned I'm guessing the US government (and I imagine other countries) doesn't either. However, I'm glad to hear a basis for NFTs.
This means both parties no longer need any relationship between the initial sale and claiming the eventual goods. The winery will simply be able to wait for someone to return with proof of ownership at a later date.
If the winery gave out certificates or built some app it would need to verify and maintain that. With an NFT there is very little work on their end.
Ultimately this turns these type of products into highly liquid assets. This will greatly increase their value to a potential customer and the initial purchase price. Which will make the winery more money for the wine it sells.
This can effectively be done with anything that can be claimed at a later date after initial purchase.