Explain it to me like I'm 5.

[TopHook]

What is an NFT? I looked it up but still have no idea.

 

[quickfeet]

What Is An NFT? Non-Fungible Tokens Explained

Non-fungible tokens (NFTs) seem to be everywhere these days. From art and music to tacos and toilet paper, these digital assets are selling like 17th-century exotic Dutch tulips—some for millions of dollars. But are NFTs worth the money—or the hype? Some experts say they’re a bubble poised to pop

www.forbes.com

 

[quickfeet]

"NFT stands for non-fungible token. It’s generally built using the same kind of programming as cryptocurrency, like Bitcoin or Ethereum, but that’s where the similarity ends.

Physical money and cryptocurrencies are “fungible,” meaning they can be traded or exchanged for one another. They’re also equal in value—one dollar is always worth another dollar; one Bitcoin is always equal to another Bitcoin. Crypto’s fungibility makes it a trusted means of conducting transactions on the blockchain.

NFTs are different. Each has a digital signature that makes it impossible for NFTs to be exchanged for or equal to one another (hence, non-fungible). One NBA Top Shot clip, for example, is not equal to EVERYDAYS simply because they’re both NFTs. (One NBA Top Shot clip isn’t even necessarily equal to another NBA Top Shot clip, for that matter.)"

 

[quickfeet]

Think like a digital baseball card, or a digital beanie baby, or a any kind of collectible set. Within a given set, there are some that are common, and some that are very rare. If there is a desire to own a NFT within a given set, that set increases in value. The larger the desire for that set, the larger the value of the overall set. And within that set, the tokens increase in value based on rarity.

The value of these individual tokens can vary drastically depending on interest and rarity.

And the software encodes them so they cannot be counterfeited.

 

[Emma tenywa]

There's this story of a guy who mistakenly sold his NFT worth around $250000, for as low as $7000. Been around the internet for some time now.

 

[TopHook]

There's this story of a guy who mistakenly sold his NFT worth around $250000, for as low as $7000. Been around the internet for some time now.

What Is An NFT? Non-Fungible Tokens Explained

Non-fungible tokens (NFTs) seem to be everywhere these days. From art and music to tacos and toilet paper, these digital assets are selling like 17th-century exotic Dutch tulips—some for millions of dollars. But are NFTs worth the money—or the hype? Some experts say they’re a bubble poised to pop

www.forbes.com

"NFT stands for non-fungible token. It’s generally built using the same kind of programming as cryptocurrency, like Bitcoin or Ethereum, but that’s where the similarity ends.

Physical money and cryptocurrencies are “fungible,” meaning they can be traded or exchanged for one another. They’re also equal in value—one dollar is always worth another dollar; one Bitcoin is always equal to another Bitcoin. Crypto’s fungibility makes it a trusted means of conducting transactions on the blockchain.

NFTs are different. Each has a digital signature that makes it impossible for NFTs to be exchanged for or equal to one another (hence, non-fungible). One NBA Top Shot clip, for example, is not equal to EVERYDAYS simply because they’re both NFTs. (One NBA Top Shot clip isn’t even necessarily equal to another NBA Top Shot clip, for that matter.)"

Think like a digital baseball card, or a digital beanie baby, or a any kind of collectible set. Within a given set, there are some that are common, and some that are very rare. If there is a desire to own a NFT within a given set, that set increases in value. The larger the desire for that set, the larger the value of the overall set. And within that set, the tokens increase in value based on rarity.

The value of these individual tokens can vary drastically depending on interest and rarity.

And the software encodes them so they cannot be counterfeited.

 

[quickfeet]

View attachment 66443

Explain it like I'm five: Baseball cards on the computer. And if you have a Rookie Mike Trout its going to be worth much more than the other digital baseball cards

Another example:
Beanie babies on the computer. No one gives a shit about beanie baby NFTs so none of them are worth anything

 

[TopHook]

Explain it like I'm five: Baseball cards on the computer. And if you have a Rookie Mike Trout its going to be worth much more than the other digital baseball cards

Another example:
Beanie babies on the computer. No one gives a shit about beanie baby NFTs so none of them are worth

"Baseball cards on the computer" like images to use for something?
Maybe you should be explaining it like I'm a liberal.

 

[quickfeet]

"Baseball cards on the computer" like images to use for something?

A digital "token" that is representative of the ownership of that baseball card "image" (in this example)

Where the token is a long string of letters and numbers which you own the encryption key to that no one can replicate.

But you can sell that token and the encryption key to someone else

 

[TopHook]

A digital "token" that is representative of the ownership of that baseball card "image" (in this example)

Where the token is a long string of letters and numbers which you own the encryption key to that no one can replicate.

But you can sell that token and the encryption key to someone else

 

[quickfeet]

But not just anyone can make MLB baseball cards. If a Joe off the street does it, the MLB can take them to court for copyright/trademark infringement.

So for the NBA "top shot" NFTs, the NBA owns the right to those. And people can own a token representative of ownership of a gif. And the NBA can dictate how many of each gif they want to release. Because they are built on the backbone of crypto, they can't be replicated.

So if the NBA released 10,000 Giannis dunk against the Hawk tokens, but only 10 Lebron blocked shot against the Clipper tokens, the Lebron NFT would be worth much more based on rarity

 

[22*43*51]

"Baseball cards on the computer" like images to use for something?
Maybe you should be explaining it like I'm a liberal.

 

[TopHook]

But not just anyone can make MLB baseball cards. If a Joe off the street does it, the MLB can take them to court for copyright/trademark infringement.

So for the NBA "top shot" NFTs, the NBA owns the right to those. And people can own a token representative of ownership of a gif. And the NBA can dictate how many of each gif they want to release. Because they are built on the backbone of crypto, they can't be replicated.

So if the NBA released 10,000 Giannis dunk against the Hawk tokens, but only 10 Lebron blocked shot against the Clipper tokens, the Lebron NFT would be worth much more based on rarity

I get the rarity of a "code". What is the code? How is that generated and who decides how rare it is? The owner of code decides where and when it's able to be used?

 

[quickfeet]

I get the rarity of a "code". What is the code? How is that generated and who decides how rare it is? The owner of code decides where and when it's able to be used?

so if someone created a string of numbers and letters that are representative of something, anyone could copy and paste it and say: I own this string of numbers and letters and therefore I have the rights to what it represents.

But if you encrypt that string of numbers and letters that is representative of something, only the person that has the key (think password) can decrypt the message and prove they own the token.

 

[ChicagoFats]

I get the rarity of a "code". What is the code? How is that generated and who decides how rare it is? The owner of code decides where and when it's able to be used?

The code is verified on the blockchain. In the case of NFT’s these are usually smart contracts attached to the ethereum block chain.

The “code” is a cryptographic algorithm (Secure hash algorithm or SHA-256) that takes the data and encrypts it and makes it available only to the person with the code.

The data can be anything. If an artist makes a piece of art and then gives the secret code to whomever purchases the art, that person owns the art because they are the o ky one who knows the secret code.

 

[quickfeet]

Think of the encrypted message as a contract that expresses ownership of something

 

[quickfeet]

The code is verified on the blockchain. In the case of NFT’s these are usually smart contracts attached to the ethereum block chain.

The “code” is a cryptographic algorithm that takes the data and encrypts it and makes it available only to the person with the code.

The data can be anything. If an artist makes a piece of art and then gives the secret code to whomever purchases the art, that person owns the art because they are the o ky one who knows the secret code.

Right.

The record of the ownership of the key is spread across every computer that is on the blockchain, so thousands of computers can validate: the ownership of the key is this person.

 

[PleasureMoose]

The code is verified on the blockchain. In the case of NFT’s these are usually smart contracts attached to the ethereum block chain.

The “code” is a cryptographic algorithm (Secure hash algorithm or SHA-256) that takes the data and encrypts it and makes it available only to the person with the code.

The data can be anything. If an artist makes a piece of art and then gives the secret code to whomever purchases the art, that person owns the art because they are the o ky one who knows the secret code.

You mention art...So are NFTs just a way to store wealth in a crypt code and transfer large amounts of money to someone? Who oversees the ledger or books? This shit confuses me sometimes..

 

[PleasureMoose]

Logan Paul Loses More Than Half a Million on NFT

Internet sensation Logan Paul has been very public about his NFT and Crypto punk craze. However, Paul recently lost half a million on an NFT.

www.essentiallysports.com

He's got a good video in this link where he "kinda" explains it on his podcast

 

[ChicagoFats]

Take the Mona Lisa for example.

You could generate a NFT that was attached to the Mona Lisa. In order to view the Mona Lisa you have to pay a small fee, let’s say $1.

There could be a smart contract that says “if someone pays x dollars, then display the Mona Lisa”. So the client pays the fee and the artist gets the money and the customer gets to view the Mona Lisa. All without a bank ever getting involved in the transaction.

Basic transaction. But some NFT nerd that I worked with and went to Carnegie Mellon always used to ask me what was different about NFT’s from owning original art.

Me “but you can just copy the digital picture of the Mona Lisa with a right click”

Him “you can xerox a real picture of the Mona Lisa”

So forth and so on.

 

[ChicagoFats]

You mention art...So are NFTs just a way to store wealth in a crypt code and transfer large amounts of money to someone? Who oversees the ledger or books? This shit confuses me sometimes..

It is a decentralized ledger, meaning it’s on many computers.

Everyone has a copy of the whole ledger and can verify any transaction at any time.

Since no one person controls the ledger it is called decentralized. If one computer is faulty the other computers will call it out and get rid of it.

The blockchain oversees the ledger.

Imagine all the computers have to speak the same language, or protocol. If one starts to act weird and give bad info, the other computers kick it out. So the blockchain oversees itself in a way. These are called distributive systems and it’s highly scientific how they choose which computers are trustworthy.

Compare this to centralized control like Facebook where they control all the data and information that crosses their computer. Facebook would ultimately decide what’s ok and what’s not as opposed to a distributed, decentralized system

 

[quickfeet]

Take the Mona Lisa for example.

You could generate a NFT that was attached to the Mona Lisa. In order to view the Mona Lisa you have to pay a small fee, let’s say $1.

There could be a smart contract that says “if someone pays x dollars, then display the Mona Lisa”. So the client pays the fee and the artist gets the money and the customer gets to view the Mona Lisa. All without a bank ever getting involved in the transaction.

Basic transaction. But some NFT nerd that I worked with and went to Carnegie Mellon always used to ask me what was different about NFT’s from owning original art.

Me “but you can just copy the digital picture of the Mona Lisa with a right click”

Him “you can xerox a real picture of the Mona Lisa”

So forth and so on.

I don’t really understand this one

 

[quickfeet]

It is a decentralized ledger, meaning it’s on many computers.

Everyone has a copy of the whole ledger and can verify any transaction at any time.

Since no one person controls the ledger it is called decentralized. If one computer is faulty the other computers will call it out and get rid of it.

The blockchain oversees the ledger.

Imagine all the computers have to speak the same language, or protocol. If one starts to act weird and give bad info, the other computers kick it out. So the blockchain oversees itself in a way. These are called distributive systems and it’s highly scientific how they choose which computers are trustworthy.

Compare this to centralized control like Facebook where they control all the data and information that crosses their computer. Facebook would ultimately decide what’s ok and what’s not as opposed to a distributed, decentralized system

Yes, you nail it here. And to some degree this is why I scratch my head at why so many cryptocurrencies hold value. The technology is so much more a mechanism to facilitate something larger, rather than an end product in itself. I guess by investing in them you are saying: this “currency” will become the mechanism that facilitates future digits transactions.

 

[quickfeet]

Thesis:
I do believe that NFTs are a great tangible use case for the crypto mechanism. However, you don’t have to have and specific cryptocurrency to facilitate it. So this is one stop in the direction of saying: you don’t need cryptocurrencies specifically, but the mechanism itself is valuable. The real thing of value is the end product, or token itself. As these end products start coming into existence, the cryptos themselves will fall by the wayside.

I believe what will happen with the “currency” itself is that the existing financial system will completely adopt the technology

 

[ChicagoFats]

Yes, you nail it here. And to some degree this is why I scratch my head at why so many cryptocurrencies hold value. The technology is so much more a mechanism to facilitate something larger, rather than an end product in itself. I guess by investing in them you are saying: this “currency” will become the mechanism that facilitates future digits transactions.

Yes.

I view it as buying the currencies makes the price go higher. When the price goes higher it encourages the development of the network because it encourages miners to mine the coin. So i view it as investing in building a peer-to-peer network. You invest now and later when your currency is more widely used, you already have the currency.

The different networks can do different things. BTC can do different things that ETH which can do different things than LITECOIN.

In my opinion, the different networks will survive and prove to be useful. There is room for many peer-to-peer networks, as the possibilities for their uses are literally endless.

 

[ChicagoFats]

Thesis:
I do believe that NFTs are a great tangible use case for the crypto mechanism. However, you don’t have to have and specific cryptocurrency to facilitate it. So this is one stop in the direction of saying: you don’t need cryptocurrencies specifically, but the mechanism itself is valuable. The real thing of value is the end product, or token itself. As these end products start coming into existence, the cryptos themselves will fall by the wayside.

I believe what will happen with the “currency” itself is that the existing financial system will completely adopt the technology

For NFt's you absolutely need crypto currency. If you don't have the crypto, you can't prevent the "double spend" problem.

That is, if we have a digital Mona Lisa, how would you know it was the real mona lisa and not one that was right clicked, copied and saved?

 

[PleasureMoose]

Do you think it would be a good idea to invest say $2000 into one NFT instead of giving my guy at Raymond James the money. Do I just download a app and start buying NFTs with my cash
@quickfeet
@ChicagoFats

 

[ChicagoFats]

I don’t really understand this one

Lets pretend we have a michael jordan rookie bascketball card.

Lets say I have the physical, real, original card in my posession. And lets say you have purchased the NFT to the same card.


Now lets talk about the differences between what we own. I'll start. I have a physical card and you have a digital representation of the same thing. Now you name some things that are different between the two.

Spoiler

Bear with me its been a year or so since I have done this exercise

 

[Cincinattus91]

Yes, you nail it here. And to some degree this is why I scratch my head at why so many cryptocurrencies hold value. The technology is so much more a mechanism to facilitate something larger, rather than an end product in itself. I guess by investing in them you are saying: this “currency” will become the mechanism that facilitates future digits transactions.

I also struggle to see the monetization of many cryptos

I see them providing service but not sure that equates to revenue ala Wikipedia

 

[ChicagoFats]

Do you think it would be a good idea to invest say $2000 into one NFT instead of giving my guy at Raymond James the money. Do I just download a app and start buying NFTs with my cash
@quickfeet
@ChicagoFats

You really need to follow the industry and know what you are doing before you buy NFT's in my opinion. There are a lot of people out there looking for pick offs with computer programs etc. Reall you would just be taking a coin flip right? It would be 50-50 you either make or lose money, there is no educated guess to give you a little advantage like say maybe 45-55. So its not going to kill you to gamble $2k but i think there are bets that you probably understand better.

If it was me and I wanted to gamble and try and it it big id look into the cryptos. Throw it at HBAR, i like that better than some random NFT. I bought some this morning. My main horse is ETH though.

 

[ChicagoFats]

I also struggle to see the monetization of many cryptos

I see them providing service but not sure that equates to revenue ala Wikipedia

If you see the service then the revenue is there. The revenue is created by the service. That is, in order to use the service you have to have the coin.

In order to use a verified, cashless, anonymous, digital money transaction (bitcoin) you are going to need the bitcoin.

 

[PleasureMoose]

You really need to follow the industry and know what you are doing before you buy NFT's in my opinion. There are a lot of people out there looking for pick offs with computer programs etc. Reall you would just be taking a coin flip right? It would be 50-50 you either make or lose money, there is no educated guess to give you a little advantage like say maybe 45-55. So its not going to kill you to gamble $2k but i think there are bets that you probably understand better.

If it was me and I wanted to gamble and try and it it big id look into the cryptos. Throw it at HBAR, i like that better than some random NFT. I bought some this morning. My main horse is ETH though.

OK so my guy at Raymond James. Gotcha
I'm in elementary school when its come to this stuff

 

[TopHook]

Take the Mona Lisa for example.

You could generate a NFT that was attached to the Mona Lisa. In order to view the Mona Lisa you have to pay a small fee, let’s say $1.

There could be a smart contract that says “if someone pays x dollars, then display the Mona Lisa”. So the client pays the fee and the artist gets the money and the customer gets to view the Mona Lisa. All without a bank ever getting involved in the transaction.

Basic transaction. But some NFT nerd that I worked with and went to Carnegie Mellon always used to ask me what was different about NFT’s from owning original art.

Me “but you can just copy the digital picture of the Mona Lisa with a right click”

Him “you can xerox a real picture of the Mona Lisa”

So forth and so on.

OKay. the picture I take for work has a a;lsdkfj.jpeg identity. if a 3rd party uses that image has to pay me to use it?

Edit: When does the $ become part of the system? They have their own number.

 

[shiv]

Fuckin awesome thread. It’s activated my almonds for sure

 

[TopHook]

Is to have the "Original' the design?

 

[Cincinattus91]

If you see the service then the revenue is there. The revenue is created by the service. That is, in order to use the service you have to have the coin.

In order to use a verified, cashless, anonymous, digital money transaction (bitcoin) you are going to need the bitcoin.

Not all services on the internet are monetized

Bitcoin is a store of value

I'm taking about coins like Dot which basically link different blockchains

 

[TopHook]

Not all services on the internet are monetized

Bitcoin is a store of value

I'm taking about coins like Dot which basically link different blockchains

Just looked up blockchain. So... it could possibly be hacked.

 

[PleasureMoose]

Lets pretend we have a michael jordan rookie bascketball card.

Lets say I have the physical, real, original card in my posession. And lets say you have purchased the NFT to the same card.


Now lets talk about the differences between what we own. I'll start. I have a physical card and you have a digital representation of the same thing. Now you name some things that are different between the two.

Spoiler

Bear with me its been a year or so since I have done this exercise

one looks like this nzdfuy5441.415ffdsg/5fg1
and one I can hold in my hand that looks like this:


Also: If I'm paying that much money I'm trying my hardest to own both

 

[ChicagoFats]

OKay. the picture I take for work has a a;lsdkfj.jpeg identity. if a 3rd party uses that image has to pay me to use it?

Edit: When does the $ become part of the system? They have their own number.

If that’s what’s in the contract. Smart contracts can say whatever the issuer wants.

I’ve seen some artist say that every time the ownership changes hands a 10% fee is given to the artist.

Each artist / issuer can come up with their own compensation scheme I believe.

 

[ChicagoFats]

Just looked up blockchain. So... it could possibly be hacked.

Bitcoin has never been hacked.

It is vulnerable to a 51% attack which is when more than half the computers on the network are compromised.

It is thought that the amount of electricity required to hack Bitcoin would cost greater than the amount of Bitcoin, so as is it wouldn’t make sense to hack it. It may also be vulnerable to quantum computing but that has not been exposed so far.