What exactly are Non-Fungible Tokens?
We’ve all heard the story of some 12-year-olds making millions with their pixelated jpeg images selling online for the same price as original Monets or even a custom gold-wrapped Lürssen mega yachts, and instantly questioned our life choices. Well then welcome to the wonderfully weird world of NFTs:
A extortionately hyped way of buying art, or a revolutionary Leviathan of technological excellence just waiting to be leveraged?
NFTs are like title deeds. The represent ownership. Whatever metadata (a fancy dev way of saying some art/images/information, et cetera) is linked to it is wholly insignificant. NFTs are represented by a few lines of code, secured by a myriad of protocols.
This code is better known as a ‘smart contract’, and its security measures are inherent to the very ‘platform’ that facilitates smart contracts - the blockchain. Blockchains such as Ethereum are merely decentralized (meaning no central authority) ledgers tracking and validating the movement of digital money or tokens (NFTs), as it executes the smart contracts that run on it.
Since validation is done by a hive of computers (nodes) and global networks that track each transaction, it is secure, failproof and surprisingly brilliant at verifying information. A perfect enabler for secure ownership.
Ownership inherently requires a contractual agreement to be met. These agreements can be hardcoded into a smart contract to ensure transactions ‘self-execute’ within the stipulated boundaries – while all being verified and visible on the blockchain.
This sums up NFTs. Not as the exorbitantly overvalued mediocre MS paint art, but as immutable code living on a secure chain, providing us with secure, high-tech provenance tracking and authentication.
Now that’s the underhyped bit.
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