Ownership data is not stored on chain because it is technically impossible. Chain only knows which wallet owns which URL-hash, and nothing else. Which real life person owns which real life physical or digital off-chain artifact (like deed, or picture, or a key), chain doesn't know and can't know. This info is stored in the centralised DBs managed my centralised entities like a company or government.
Ownership data meaning the NFT itself and which can be proved by the holder using his/her private key. Off-chain data (such as personal information or supplemental documents) doesn't have to be stored in centralized databases. It could be stored in federated systems, or a local computer at the owner's residence, or a hosted server controlled by the owner. The chain can hold a hash of the identifying information and then an application can pull the data from wherever it is stored and referenced and check that is correct by recomputing the hash and comparing that to what is stored on chain.
"federated systems, or a local computer at the owner's residence, or a hosted server controlled by the owner."
That's just centralised in a different form. Or more precisely - not decentralised.
Sure, some app can interact with centralised DB holding all actual information like deeds or music or whatever. Why do you need NFTs for that? Centralised BD must me utilised to track ownership of actual data or items by real people and it won't work any other way due to the IP rights and complex ownership agreements. NFTs are useless and impotent for this task.
> That's just centralized in a different form. Or more precisely - not decentralized.
How many copies of the data in different locations do you need to be considered decentralized? In fact, I'd argue you just care about having enough copies of the off-chain data that you feel well insulated from data loss, so I'm not sure that the off-chain data needs to actually be decentralized. The goal is to have the ownership proof (on-chain NFT) be as decentralized and easily auditable as possible.
> Sure, some app can interact with centralised DB holding all actual information like deeds or music or whatever. Why do you need NFTs for that? Centralised BD must me utilised to track ownership of actual data or items by real people and it won't work any other way due to the IP rights and complex ownership agreements. NFTs are useless and impotent for this task.
I feel like many of these conversations in this thread are focused on the current state of blockchain adoption today. I don't know of any government today that has adopted a blockchain to track property records at scale, but I do think that will probably come eventually. As soon as that happens, then you can have rules and regulations drafted around all these tertiary concerns including IP rights and complex ownership rights, potentially some of those codified in on-chain contracts, but some would remain as processes for the government or the courts. Putting property deeds in an NFT on a blockchain does not solve all problems that arise with property ownership, but it could improve the record keeping process in some areas.
User illiarian wrote a good answer for you, but I want to add one more point:
IP rights aren't just for property deeds, they are relevant for every single digital or physical creation made by humans. So let's take a picture as an example:
There are NFTs and associated CDBs which supposedly allow trading pictures TODAY. No need to wait for any government or laws or technical advances. Supposedly NFTs allow me to buy and sell pictures in a decentralised way right here and now. The problem is that they can't do it. There is technically nothing inside NFT which can deal with IP rights for the pictures. You can't transfer IP rights completely, you can't do it partially, you can't do it with multiple peers, and of course you can't do any combination of the above. So current NFT platforms either ignore it or do it old fashioned way with centralised accounts, Terms of Service and other centralised stuff tracked on the platform and not on chain.
No need to wait for some far future and government adoption, NFTs has already failed at the much more simpler task and have no paths forward from this failure.
> but I do think that will probably come eventually.
For it to "come eventually" you need to answer all these questions that you ignore or swat aside as irrelevant, or easily solvable by magic.
> As soon as that happens, then you can have rules and regulations drafted around all these tertiary concerns including IP rights and complex ownership rights
No. These things have to be solved first. because complex ownership rights exist today, and not in some fantastical future after blockchain has been implemented at scale.
> potentially some of those codified in on-chain contracts
"On-chain contracts" of course make zero sense even for the most trivial of cases. Much less the complex ones.
Because what you propose is replicating human-readable texts with programs in esoteric programming languages that get routinely "hacked" because even multiple audits cannot find vulnerabilities in them. And for what?
> Putting property deeds in an NFT on a blockchain does not solve all problems that arise with property ownership, but it could improve the record keeping process in some areas.
It "may improve record keeping" but produce an insane amount of complexity, inane and insane workarounds, friction and problems everywhere else. So, will not be implemented until those issues are solved.
> In fact, I'd argue you just care about having enough copies of the off-chain data that you feel well insulated from data loss, so I'm not sure that the off-chain data needs to actually be decentralized.
Remember how it all started? "The [government] staff still does what they do today, but they no longer need to maintain their own database and IT application."
And now they need to maintain "enough copies of the off-chain data" anyway and deal with blockchain.
So actual data that proves that this physical person is the owner of this physical asset.
> It could be stored in a, b, c
> then an application can pull the data from wherever it is stored
Ah yes. Because when it's stored in a non-centralised database of "local computer at owner's residence" or "hosted server controlled by the owner" that data is easily accessible and retrievable.
Remember we were talking about property deeds? Their availability is of great concern.
Before you answer that, go back over all your comments here and in other threads, collect all the limitations you've run into, all the workarounds you proposed, all the additional external systems you need to run just the most trivial of scenarios, and riddle me this: why would anyone want this?
