What is this strange acronym which is currently sending cascades of vibrations across the internet ether? What the fuck is an NFT? Sounds medical…
The truth is, if you’re not in/new to the space the wafty jargon and terms probably make this a bit of a headfuck to wrap said head around. So I’m going to put this in the best nutshell possible, to hopefully shed some light on the topic.
An NFT (Non-Fungible token), is essentially a digital version of one of those little holographic stickers or signatures you get on the back of a collectible, piece of artwork or memorabilia. As you know, those little bad boys communicate a few things: the value, ownership, scarcity and authenticity of the item.
Up until the nifty NFT came along, we essentially had no way to validate the above for digital assets. Think digital collectibles, artwork and items from video games. If you wanted to buy/sell one of these things, you’d be caught in this ‘shootout at high noon’ situation of who’s going to make the first move. Do you pay for it first, but then not get it? Or do you send the item and pray/hope that the rando username on the other end of the internet will uphold their end of the bargain. Do they even own the item?
It was a fucking nightmare.
Another thing to bear in mind is the authenticity aspect. When you collect something, you do it because what you own is unique, or part of a small mint etc. That’s what gives you the satisfaction, the rarity. If you have a piece of digital art, what’s stopping someone from just copy pasting that shit and saying there’s is the legit one? NFT’s baby. They’ll have a worthless copy and you’ve got the real Mccoy, laughing your way to the big time (unless you sell it or accidently lose it much like this classic crypto moment).
These are the beauties that are enabling people to put a tangible aspect of ownership to digital items and they’re made possible by blockchain technology and something called smart contracts.
Smart contracts are a bit of computer code that perform a set of instructions. In this case, the smart contracts contain identifying information that makes an asset completely unique. Digital asset + smart contract = NFT.
The reason these smart contracts are so sick is because of what they bring to (or remove from) the table when it comes to transactions.
A typical transaction :
Think about when you buy something online, how many layers do you have to go through? A listing site, a payment system, registering ownership with authorities, refunds? Each of these aspects and more is controlled by different individuals or companies and you’re putting your complete trust in these sites/services. How easy would it be for a little shit bag to tweak one of these aspects and make the whole process void?
Smart contracts flip the script on all of this. They remove all of the middlemen that validate or hold your information as all of that’s done on the Blockchain instead.
More bad-boy Smart contract / Blockchain features below –
When you’re doing business on the blockchain with SC’s they use Cryptography which stops people altering records. This means this shit is more secure than Fort Knox on inspection day and also guarantees you full accurate insight into an items sales history.
Another plus, is that unlike a politician’s expenses, SC’s are completely transparent. Everyone and their dog on the blockchain can see what the contract is and what it’s being used for.
There’s no third wheeling, as we all know it’s incredibly awkward. With SC’s, there’s no need for third parties involvement to verify anything. Your buddy blockchain got you covered for that.
Lastly, when you’re writing in code, it’s accurate AF and completely autonomous. There’s no weird translatable grey areas or waiting on some dude to push a button.
So to the best of my knowledge, that’s the most relatable way I can put NFT’s over to you.
They’re a genuinely exciting development from the tech world, that’s rippling into the worlds of art, design, gaming and more. They’re going to change the landscape in such a positive way and give so many talented individuals the platform to be able to add tangible value to their creativity and give them the reward and recognition they deserve.
This shit’s about to get really exciting.