What exactly is a VERO?
What exactly is a VERO?
The concept of a VERO is a little complicated for those without a background in cryptocurrency and non-fungible token (NFTs). Therefore, the following is largely intended to explain how VEROs work.
To begin, every rare and uniquely identifiable object in the real world (i.e. physical rather than digital) can have a virtual equivalent, a VERO. This VERO is a type of token that represents virtual ownership rather than ownership over the actual object. Because the token is unique, it represents a non-fungible token. The token is linked to a 3D model of the actual specimen. This is, effectively, how the virtual version is represented, although the VERO itself is nothing more than the token.
This means that VEROs represent ownership of a sort of imaginary equivalent to the real object. If this seems strange, cryptocurrency is imaginary (there are no physical assets). NFTs represent imaginary ownership over digital media. The digital media is accessible and NFT ownership does not give you any rights to the media. And so people do get behind the idea of imaginary ownership. But because the illusion is collective and backed with digital technology, we tend to take all of this for granted.
If the right conditions are met, minting an NFT for a 3D model generated from a uniquely identifiable object creates a new asset, a VERO, from an older asset (a real object). The owner of both assets can now sell each of these assets to different buyers. Although VEROs are ontologically anchored to their real objects, they are not coupled together in terms of ownership. They can follow entirely different transaction pathways.
Therefore, the NFT is a vehicle for the VERO. But minting a regular NFT from a 3D model of a real object does not create a VERO. That is because there is no way of anchoring the 3D model to the real object for the duration of the real object. The VERO is built around this concept of anchorage. If their real object equivalents are permanently lost or destroyed, VEROs are invalidated and go back to becoming regular NFTs. Because we cannot yet properly anchor these entities, we cannot yet produce VEROs. This is where the smart contract is essential.
Smart contracts
A smart contract is a program on a blockchain that runs when a set of conditions are met. A blockchain is a decentralized digital ledger in which records are lumped together into blocks. Blockchains can create a permanent, public, transparent ledger system, enabling every party to know what tokens belong to whom. All NFTs are minted through smart contracts.
A smart contract creates a mechanism to ensure that the criteria for a VERO are met. These criteria are as follows:
The owner of the real object equivalent either mints and registers the VERO or authorizes this process through a delegate. Therefore, the owner of the VERO is also the owner of the real object until they sell either one or both of those assets.
The location of the real object must be known and it should be stored in a location that ensures perpetual storage and care. If the object is too large to store in a building, then it should be robust and well-maintained (e.g. the Eiffel Tower).
The NFT is linked to a uniform resource identifier (URI) through which a 3D model can be downloaded. The 3D model must be as faithful as reasonably expected to the real object and it must always be publicly available.
The real world object is associated with a globally unique identifier with metadata that can be freely accessed via the internet.
The real world object must not already have been approved as a VERO. There can only be one VERO per real object.
The beauty of smart contracts is that they allow everyone to see all the other commodities that have been sold using that smart contract. Therefore, the best thing would be to have a single smart contract for VEROs. That way everyone can see what VEROs are out there and how much they are trading for. If everyone developed a separate smart contract, VEROs would start out like the wild west.
Another important reason for having a single smart contract for all VEROs is that it makes it much easier for software developers to develop apps and games for them. And the compatibility of VEROs with online virtual worlds is one of the principal advantages of VEROs over regular NFTs.
Once the smart contract is up and running, the specific criteria that should be met are not engraved in stone. There will be plenty of opportunity for a broad community of taxonomists, art historians, palaeontologists, archaeologists and curators to come together and help shape the VERO in order that the largest number of people benefit.
