Misunderstandings and Analysis of the Actual Functions of Nostr Assets

Misinterpretations and Misconceptions of the True Functions of Nostr Assets

Author: Ajian Source: X (original Twitter) @AurtrianAjian

It is difficult for everyone to understand that Nostr Assets (hereinafter referred to as “NA”) are misled by its name. In fact, it is only a method of controlling (custody) wallets using Nostr messages, not a method of “issuing assets” (which is why it needs “Taproot Assets (Taro)” and others), and it cannot really use Nostr public keys to independently store assets.

Nostr is a message protocol, and its core is that each message carries a signature, but there is nothing else. Because there is no means to control double spending, it cannot be used to issue assets, and you cannot use Nostr public keys to hold assets. The real issuance and custody of assets are still done through the blockchain. NA is doing nothing more than:

A server controls a custodial wallet, allowing you to send instructions to it using Nostr messages; when everyone uses the same custodial wallet, you can naturally transact internally without the need for blockchain confirmation. NA’s document indicates that it also supports using this method to control independently custodial Bitcoin wallets, but what users currently experience are custodial wallets. See:

• November 10th AMA Playback What can you still buy with BRC20?
• The “Sobering” State of ERC-4337 Adoption: A Roller Coaster Ride for Smart Accounts
• Lattice Blockchain is the computer hardware itself.

In comparison, you can take a look at the NIP-47 Nostr Wallet Connect proposed by Alby (yes, it is the custodial Lightning wallet you all like to use):

Its idea is to combine a Nostr client with a Lightning node, allowing us to directly control this independently custodial Lightning node through Nostr messages. This Nostr client will verify the signature, decrypt, and use the commands in the encrypted messages received.

Friends familiar with network engineering will realize that this is a kind of remote control tool, just like SSH. However, with Nostr, it is further liberated, and any Relay can support such remote control. Isn’t it similar to NA? But I prefer this usage.

But at the same time, I also believe that NA has taken a step towards the right method: you can understand the Relay that supports NA (and its custodial wallet) as an exchange, and you can register on this exchange with just a Nostr public key (no email, no phone number); moreover, the commands you send to it have clear signatures; conversely, all its state transitions require the signature of a Nostr public key as evidence.

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