What is NFT called?NFT is made up of the initial letters of the three English words Non, Fungible, and Token, which is translated into Chinese as Non-Fungible Token.
In fact, even if directly translated, I think we can not quite understand what is called non-identical value of the token. Here's a simple example you can get right away.
If I have a one hundred dollar bill in my hand, and you have a one hundred dollar bill in your hand, and I want to exchange it with you, you'll think, "No problem, let's do it". Because two one hundred dollars belong to the same value. If you have a hundred dollars in your hand with Jay Chou's signature, then I'm going to take a hundred dollars in my hand to exchange with you when you won't be able to exchange with me, because the value of a hundred dollars in your hand may be worth 100,000 dollars.
This is the meaning of non-identical tokens, which look like the same thing, but are not the same value, and the one with Jay's signature is unique.
Why has NFT been especially valued by the tech and trend worlds in recent years?
Because on March 11th last year Christie's held an unprecedented digital art auction, in the past, digital art was not able to enter the auction house to do the auction, a very important reason is that the digital file can be easily copied and there is no way to verify its origin and authenticity.
Everyone should have seen this work on the screen, which came from an American artist named Beeple, who spent fourteen years uploading a piece of digital art to his social network every day, so this piece of work was auctioned at Christie's on March 11th, 21st, and the name of the work was 5000 Days, with a final auction price of $69 million. 69 million dollars.
So, before I get started today, I'm going to give you a $69 million dollar gift!
I'm providing a high-resolution image, so move your fingers and download this one or save it quickly.
So you're saying that the image saved on your phone is exactly the same as the one in the auction, and the answer is, it looks exactly the same, but if we were to sell this image to someone today would anyone want to buy it? But if we were to sell this picture to someone today, would anyone be willing to buy it? And no one is going to be willing to buy it, just like I'm going to trade you for a $100 piece of Jay Chou's signature, you're not going to be willing to trade it because the value is not the same as it would be without this unique signature.
That's why, with NFT technology, digital art can go to the auction house because we know where it came from, and we can make it a unique creation.
The technology behind NFT has several cores, the first of which is, of course, the blockchain technology, which is not the focus of today's conversation, but it does need to be mentioned a little bit.
In the whole NFT issuance there will be a role of the issuer, the issuer must be through the blockchain above some of the platform to cast his products, for example, just mentioned the art creation, is to be through Christie's and the blockchain cooperation with the casting process, so it must have a platform, through the platform to issue a smart contract, the smart contract records the art work in the whole blockchain. How do we verify that the artwork is unique on the blockchain?
I think this is the most confusing point for everyone, so please take a look at it and clap your hands.
Because the blockchain has a feature called a sorted ledger, so it's not just recorded in a centralized company mainframe like traditional works or computers, it's not made up of a single computer but millions of computers throughout the blockchain **** with the same record, so that this record it will be thrown to the different computers above the record, and that record these points we call the point of the record, and that's where we're going. These are called nodes.
These people's creations will be thrown to different nodes to do the record, each node will write down: "Today there is a creation, through this platform to generate this contract, which in turn leaves a block inside", these blocks are called blocks, the next transaction will be done through the next block to do the chain, so each block is connected, we call it a block. After connecting them, we call it block chain, which is the origin of blockchain.
We can imagine what would happen if someone wanted to tamper with the release of this work today, or if someone wanted to steal it. It would have to be possible to modify the records of so many computers at the same time, which is not possible because there are millions of nodes around the world that are recording the ledger, and that's what ensures that the distribution mechanism is unique.
This is not the most critical aspect of smart contracts, which give NFTs the next most important feature of automated execution, and the ability to continue to create intermediate value and distribution of benefits.
For example, after a publisher publishes a work, there is a buyer A who wants to do business with him, but in traditional art, when I paint a painting and sell it to this buyer, it is his right to dispose of it, for example, he may take it to a second-hand trading platform or a platform such as Christies to do an auction, but for the creator, I don't get any income after the second-hand transaction. But for the creator, I don't have any income after the second-hand transaction, except for the reputation, but smart contracts bring a new and different value to all the creators or artists, where is it?
If a buyer wants to buy an NFT from a publisher, let's say the buyer's bid is $1 million, and we have to pay the platform a 2.5% commission on each transaction, for example, 25,000 bucks, but I have to pay the publisher $100,000 in royalties on the transaction, and then the buyer has to pay the publisher $875,000 to buy the work, which makes up the buyer's entire $1 million. These three payments make up the entire $1 million that the buyer has to allocate to the transaction, which may not be apparent in the first installment.
In fact, when it produces the second transaction, that is, when buyer A sells to buyer B, buyer A sells to buyer B for $2 million, and the distribution of that $2 million is related to the 10% royalty, so the creator gets $200,000 in royalty income, and the remaining $50,000 is given to the platform, and then 87.5% of the $2 million is given to buyer A. So it's through the automatic delivery of a smart contract, and for the publisher, it's the same as for the buyer, so it's the same as for the buyer, so it's the same as for the buyer. So it's through the smart contract that it's automatically delivered, and for the publisher he gets an ongoing royalty income, not just a one-time transaction income.
As you can imagine, the artist may not have been successful when he was alive, because everyone wanted him to die and the work to be unique. Now I don't need to, I can release a lot of unique works when I'm alive, and I don't have to sell through the hype of these collectors or through some of the activities in the middle of the second-hand trading platforms or take a cut, but I can keep the benefits in myself, which makes the artist a career that can be realized in the long term.
In fact, the smart contract on the NFT, its impact is definitely not just art, you imagine, if today you are a real estate developer, specifically responsible for building houses, when I built the first house sold to the A seller, he is a traditional transaction, but if when the A sells the house to the B, the transaction amount of 10% of the amount of money inside the hands of the return to you, this time you build a house logic is different, you will be able to build a house.
Of course, it's not just the physical object, but also the construction of the house and the transaction of its logic is different, I'm not just counting my first time to buy a house when the income minus my cost, and I will hope that my way to be sustained by the transaction or even will be value-added, because I'm in the value of every time every time the transaction inside, I will return to a certain amount of royalties back to my account, so I hope that my way to be sustained is to be traded or even to increase in value. So I want my house to be used for a long time, and it's going to increase in value over time, and we need to think about whether that's possible in other industries.
If you used to be a well-known interior designer, you used to have to draw the interior design once for every house, right? Now you don't need to, you just need to draw the design once, because your design is a masterpiece, so other designers will buy your design to change it a little bit into his thing, so you just need to draw once when other designers use your picture you can receive 10% royalties, see if it's not so good. And the more people use your design, the more famous it becomes.
The same is true for selling insurance, now insurance must rely on the insurance company's policy and then go to identify whether to send you the insurance money, the future does not need, the future of these insurance brokers as long as the creation of a smart contract, which can be built in accordance with the conditions of the buyer's own use of which some of the combination of insurance to build up, and when you happen to something, the smart contract will be automatically allocated to your account, and even it can be put in the account of the buyer, so that the buyer will not be able to use it. And it can even carry the value of your smart policy into your next generation.
So it's the same for insurance professionals, where your job is to maintain the protection now, but the protection for the next generation can be handed over to your children to inherit, because the smart contract can automatically do that for you, and it generates a period of ongoing income.
Of course, you can think of a lot more, like lawyers and healthcare, and a lot of people have smart electronic devices that they carry with them every day, and they probably collect information about your sleep.
But have you ever thought about it, your sleep data can actually be sold for money, some research organizations he wants to do sleep studies, need to collect a lot of people's information to his library to connect these data. But your data itself is NFT, you can sell it to research institutes that really need your sleep data, and then through its utilization you can receive a certain amount of money every time you go to use the research, so this time the smart contract can be applied in many, many different fields, not just artistic creation.
NFTs change the shape of the entire transaction value chain.
In the past year, one of the most famous examples of this has come from a series of player cards issued by the NBA called NBA Top Shot, which record basketball moments, the more classic of which is the recent dunk from James.
But anyone who has seen this video congratulations on earning $200,000, because this 24-second film of James dunking in the NBA Top Shot blockchain above the NFT, in the 21st year of the transaction price has reached $200,000 or more.
A lot of people would say we can see the same movie online, why would I pay for it? Of course each of them has their own different. The reason for going to buy, just like the traditional player card has a very familiar trading market, people will go to collect, I think modern people love to collect things, right?
Then these moments can be avoided after the issuance of digital player cards, the first is imitation, because it is issued by the official NFT through the blockchain, unique. The second is to extend the preservation period , because the traditional printing paper card will be preserved with time above will produce a lot of risk, may be missing and missing, may be pirated, may be damaged yellowing, these will be due to the impact of its collection value. But there is no such problem with digital player cards.
When we buy NFTs, some people do it because of personal preference, I like this thing like collecting, and some people do it because it's speculation, when I buy the NBA Top Shot it's the cheapest, as long as it's nine dollars, but after buying it, the price of taking the blind box apart may go up by 10 to 20 times. show off, to show off that I also own the card and want to show it to others, different reasons to buy it. These are the many different reasons why NFT attracts the masses **** with participation.
But I personally would suggest that when people don't know much about the true ideology of NFT, it has a lot of risks or technical considerations hidden in it that you don't know about.
When we know that there are such applications in the realm of the art world, and that the issuance of player cards in the NBA has constituted a fairly mature and well-defined market, and that blockchain is being imported into various other areas, how are we going to be able to participate in the issuance of NFTs, or buy them, or collect them? There are a few basic steps to get involved.
The first step is to have a wallet, which is like a bank account, but with the biggest difference being that the blockchain is decentralized, so there is no bank or central regulator managing the virtual currency. Instead, it's through each individual computer, which we call a node, or the people who are involved in mining, which we call miners, who are providing the computing power, that they're keeping the computing data for the virtual currencies.
Our virtual wallets are divided into three main types, the first is called a centralized wallet, which is more like a traditional institution, that is, an exchange or a company that trades in virtual currencies, and then it will provide you with a trading account.
The second is a cold wallet, which is a hardware device that is not always connected to the network, perhaps a USB disk with your public and private key cryptography on it, that you plug into a computer or device when you need to access it, and then access your wallet.
The third is an app or a web browser program, which may be on your phone or computer, and you use your private key's password to access your money when you need it.
Of course there are differences in security and convenience, but we need a place to put virtual currency.
The second part is to buy these cryptocurrencies, and there are a few places to do that, such as the centralized exchanges that I mentioned, the New York Stock Exchange, or the Forex Exchange, and one of the places where you can exchange them directly, for example, if I use an Ether, which is about 50,000 RMB right now, you can exchange 60,000 Taiwan dollars for a block of Ether, and you can exchange them at a rate of exchange. You can use this kind of exchange rate to exchange, the second you can also want to buy and sell foreign exchange or stocks like to set a price you want to buy, and then in the buyer and seller in the centralized exchange to set up the transaction.
Of course, you can also use the P2P method, if you think it's too much trouble, if you have people around you who have Ether, I'll buy it from you, of course you can, you can just transfer the RMB to me and then I'll just put the Ether through my cryptocurrency wallet and put it into your cryptocurrency wallet, and then it's done.
The third part is that we need to choose a platform for distributing NFTs, for example, you can build a public chain on the blockchain, like NBA Top Shot, which is built on the flow blockchain, or we can choose mainstream Ether as the distributor, and there are some platforms for distributing NFTs publicly, and then pay for them through your cryptocurrency wallet. The founder of Twitter turned his first-ever tweet into an NFT and sold it on the blockchain for more than two million dollars, so it's a unique seal that has been accumulated over a long period of time, and it's a proof of its time stamp and unique value.
Regarding the future development of NFT, if you go to Google, many people will say that it will be bubbling or simply a scam, well... actually there is nothing wrong, because NFT value-added is too fast, and there are too many people who want to take advantage of speculation and speculation in the middle of the people who want to make a profit, just like the network bubble in the 2000s want to dot-tom crisis, so there will be a wave in the future, so there will be a wave in the future.
There are many people who want to profit from speculation, just like the dot-tom crisis in 2000, so there will be a bubble in the future.
But the technology will remain after the bubble, and will be used in many different industries.
It's not just for commercial use, in the future we're going to go to school and get a diploma that's going to be an NFT, because there are a lot of fake diplomas and work permits out there right now, and how are you going to verify that it's not going to be done manually, but rather through the blockchain's time stamps on the top with the issuer to do the verification.
In fact, MIT did this two or three years ago, but in the future it will be more popular, and the government will have more blockchain and NFT applications.
For example, many trees can only be cut down by the government, so if each tree is uniquely labeled, the market will be able to tell who is stealing it when they buy it. That would open up a lot of possibilities for commercial or legal applications, and while there is a risk of bubbling up in the future, applications of this technology are going to continue now.
Just like every company has to have a website now, like everyone has to have social software on their hands, in the future everyone will have a public cryptocurrency wallet, a public wallet that holds all kinds of your collectibles and your membership cards, whether you're attending an event today where you're going to go to the mall to park your car, all you have to do is to sense it with the cryptocurrency and you'll be able to know how long your membership lasts, directly from the cryptocurrency. You can just use the cryptocurrency to sense it and it will know how long your membership is for, and it will deduct the money directly from the cryptocurrency wallet, without any identification or action on your part. Because everything is recorded on the blockchain, including Elon Musk, who says he drives a Toyota, and we all know that his company is Tesla, why would he mention Toyota?
If we look at his cryptocurrency wallet today and see what he drives, what he buys, how many cryptocurrencies he has in his collection, that's why another cryptocurrency, called Dogcoin, skyrocketed last year, and that public cryptocurrency in itself is one of the best brand promotions because everyone wants to be the first to know what the other person has in their collection, and by doing that, learn about a lot of their spending habits.
Perhaps there are still people today who can't understand: why is NFT only now catching fire, what's the point of holding these assets when NFT collectibles are illiquid, and why pay a premium for NFT when it can be replicated?
Maybe it all makes sense when you put it into the open world of the metaverse.
The Top Gun movie once made a beautiful prediction about the future of the world. In Oasis, a world where everyone has a free role, where classic characters from different genres of film, TV, and games converge, and where rich digital content and objects can circulate at will, there's a world where everyone has a free role, where everyone has a free role, where everyone has a free role, and where rich digital content and objects can circulate at will. In this flashy virtual world, a loser in the real world can become a superhero.
"Behind every dream lies an energetic and adventurous person. They expect nothing but surprises."
What Hal Finney said is probably the best illustration of the current NFT mania.
The next installment will tell you the story of the metaverse and NFT, so stay tuned.
Image from Unsplash, based on the CC0 protocol