Technology
NFG’s Guide to NFTs
What is the blockchain?
The blockchain is a distributed ledger, a list of transactions that’s made robust by spreading it around on multiple computers. Each transaction is duplicated, stored on many computers, and verified using complicated math.
That’s it. It’s great for verifying transactions.
A solution looking for a problem
As a distributed ledger, the blockchain is designed to be trustworthy and robust and it’s a boring technical solution to very specific problems. Any unauthorized (faked) transaction won’t be the same on every computer, or be verified by the math.
One problem no one had was securely sending money to another person, so Bitcoin was created, replying on the blockchain to track every transaction.
With some blockchains, transactions can have a comment attached to it. Just like when you make a comment on a bank transfer for groceries or rent.
Another problem no one had was selling things to people.
What is an NFT?
An NFT, or ‘non fungible token’ is a fancy name for something that is unique. In this case, it’s a unique transaction on a blockchain, with a comment that refers to something. The comment itself usually points to something on the internet, like a webpage, an image or a song, or anything at all.
An NFT is just the comment, the link, the pointer. It is not the thing itself, it is not the rights to the thing, it is not permanent access to the thing, it is not a physical copy of the thing.
You can create an NFT for facebook.com, and sell it to someone, but they don’t own facebook, nor the content on facebook’s website, or the computers that power facebook. You can sell this token because it’s just a comment that points to something. It’s as official as writing ‘facebook.com’ on a slip of paper and selling the paper.
A new one born every minute
Buying an NFT means that your account made a transaction that included a comment that points to a thing.
The value of this comment on this transaction depends entirely on every other scammer and patsy agreeing that these referrals in the comments on a blockchain have value.
And if that has value to you, I have a bridge I’d like to sell you.
--NFG
[ Feb 3 2022 ]
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