WTF is NFT, or not everything in the crypto world is just about money

When we talk about the crypt world, we usually talk about money – cryptocurrencies, cryptoasets and so on. In practice, it is possible in the cryptoworld to both earn and decency – or use a blockchain for something completely new.

What is interesting about NFT (Non-Fungible Tokens) is that even people who talk about them in an intimate way often speak as differently as if they described completely different concepts, completely different things. We find people who talk about them as a new art form, as an investment opportunity, as a digital evolution of the art world, as an opportunity to hold something that can be improved over time, and so on and so forth.

The essence of the NFT is that it is proof of ownership, proof of ownership of something that is written as a transaction in a blockchain. The record itself does nothing, except that it is unadulterated – the essential thing that takes place around the NFT is in what is linked to the NFT. And that is currently being experimented with, a lot is being experimented with. NFT is primarily traded on etherere, but a number of projects are being created on a number of blockchains, for example, game creators create their own, which solves some problems, such as the high cost of setting up and transactions with NFT.

The basic problem that the NFT solves is the creation of artificial scarcity. It is in direct opposition to what digital technologies have brought as their greatest advantage: Creating completely perfect digital copies of existing digital objects virtually free of charge. Copying has created a huge community of pirates who, thanks to easy access to information, have access to all digital content and carefully break the protections that the authors pack on them.

The NFT solves this problem, but differently than DRM solves it: DRM tries to limit the functionality of things in a controlled way – the Free Software Foundation called it “defective by design” because DRM’s job is to make sure things don’t work. NFT does something else – the process of founding NFT, or so-called minting, inserts a record of a digital object into a blockchain, making it a digital original.

The NFT is usually linked to a smart contract, a code that is executed when manipulating the NFT and can, for example, limit the number of derivations from the NFT – according to the Bored Ape Yacht Club project, it is called “apeing”. Because the digital world is more flexible than the physical one, it can follow what we would probably call a derivative work in the physical world and bind it to the digital original under the terms of a smart contract. An artist in the digital world can be not only a person, but also an algorithm that itself derives from one or more works other works that can be considered bound to the original.

This opens up possibilities, for example, in games, where both user-generated characters can be declared derived NFTs, as well as their combinations created by their development (as in Pokémon) and reproductions (as in The Sims). Yes, it’s a bit off, but the idea is probably that if you have a super rare character that you will develop in the game, you will get something that is truly unique and verifiably yours, so it will be traded. For example, if you boost a rare vehicle in the game, it will be possible to trade it as if it were a real thing.

Source: PCTuning – Všechen obsah by

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