Yesterday, I made a post about how I think RC is creating a NFT trading platform to trade memoribilia, in-game clips, movie scenes..etc. Several people voiced their concern as to me spreading FUD. I am here to assure you I am not spreading FUD. I am going to describe Blockchain and NFT's the best way I can and tie it into why I think RC is leading the way to Internet 3.0
Since the beginning of Internet 1.0...there has been good people on the inside. Brilliant people that knew the Evil, powerful people would (and did) use computer technology to rule the world. So when they were creating the foundation of computer code, they did so in a way that regular Apes, like us, could utilize this for the common good.
This is where Blockchain comes into play...
A very common question, when was blockchain invented? We see can say Blockchain was invented in 1991.
How did blockchain emerge? Stuart Haber and W. Scott Stornetta envisioned what many people have come to know as blockchain, in 1991. Their first work involved working on a cryptographically secured chain of blocks whereby no one could tamper with timestamps of documents.
These technological pioneers invented blockchain to make it much more difficult to alter emails. They made a system where you could build off of it. Making things more and more secure as time went on.
In 1992, they upgraded their system to incorporate Merkle trees that enhanced efficiency thereby enabling the collection of more documents on a single block. However, it is in 2008 that Blockchain History starts to gain relevance, thanks to the work one person or group by the name Satoshi Nakamoto.
The history of Bitcoin and its' creator, Satoshi Nakamoto , is very mysterious. Satoshi Nakamoto is the name used by the presumed pseudonymous person or persons who developed bitcoin, authored the bitcoin white paper, and created and deployed bitcoin's original reference implementation. As part of the implementation, Nakamoto also devised the first blockchain database. Nakamoto was active in the development of bitcoin up until December 2010. Many people have claimed, or have been claimed, to be Nakamoto. Truth is, no one knows who Nakamoto is.
Satoshi Nakamoto became associated with Bitcoin in 2008, when a paper titled Bitcoin: A Peer-to-Peer Electronic Cash System was published under the name. The paper laid the groundwork for cryptocurrency, detailing the bare bones of how the digital currency would come to function.
Nakamoto conceptualized the first blockchain in 2008 from where the technology has evolved and found its way into many applications beyond cryptocurrencies. Satoshi Nakamoto released the first whitepaper about the technology in 2009. In the whitepaper, he provided details of how the technology was well equipped to enhance digital trust given the decentralization aspect that meant nobody would ever be in control of anything.
Ever since Satoshi Nakamoto exited the scene and handed over Bitcoin development to other core developers, the digital ledger technology has evolved resulting in new applications that make up the blockchain History...including the development of NFT's.
Let us look at how Bitcoin can help us get away from the old system.
Bitcoin runs off a Proof-of-Work system. Proof of work (PoW) describes a system that requires a not insignificant but feasible amount of effort in order to deter frivolous or malicious uses of computing power, such as sending spam emails or launching denial of service attacks. The concept was subsequently adapted to securing digital money by Hal Finney in 2004 through the idea of "reusable proof of work" using the SHA-256 hashing algorithm.
War is the globally adopted Proof-of-Work (does POW make more sense now?) social consensus protocol that nodes (countries) use to validate the legitimate state of property and its chain of custody. Militaries project force across time (i.e., energy) in a fundamental game of probability to trigger a capitulation event. This is functionally identical to Bitcoin PoW miners projecting energy to probabilistically trigger the end of each block.
The reward for militaries that succeed in probabilistically triggering capitulation, is that participating nodes (countries) will grant consensus to the military host’s claim over what the legitimate state of property is. Thus, the history of warfare, and its corresponding chain of custody, is literally just a PoW backed blockchain. Ever notice how the reserve currency (i.e., the globally legitimized state of property) belongs to the country with the most powerful military? That isn’t a coincidence. Society instinctively values PoW as the ‘fair” consensus.
What are NFT's?
From the Ethereum NFT whitepaper, it states...
NFTs are tokens that we can use to represent ownership of unique items. They let us tokenise things like art, collectibles, even real estate. They can only have one official owner at a time and they're secured by the Ethereum blockchain – no one can modify the record of ownership or copy/paste a new NFT into existence.
NFT stands for non-fungible token. Non-fungible is an economic term that you could use to describe things like your furniture, a song file, or your computer. These things are not interchangeable for other items because they have unique properties.
Fungible items, on the other hand, can be exchanged because their value defines them rather than their unique properties. For example, ETH or dollars are fungible because 1 ETH / $1 USD is exchangeable for another 1 ETH / $1 USD.
It is the Internet of Assets
NFTs and Ethereum solve some of the problems that exist in the internet today. As everything becomes more digital, there's a need to replicate the properties of physical items like scarcity, uniqueness, and proof of ownership. Not to mention that digital items often only work in the context of their product. For example you can't re-sell an iTunes mp3 you've purchased, or you can't exchange one company's loyalty points for another platform's credit even if there's a market for it.
Here's how an internet of NFTs compared to the internet most of us use today looks...
The sky is the limit with NFTs. NFTs act as a bodyguard for a securities, commodities and individual assets.
An NFT InternetThe Internet TodayNFTs are digitally unique, no two NFTs are the same.A copy of a file, like an .mp3 or .jpg, is the same as the original.Every NFT must have an owner and this is of public record and easy for anyone to verify.Ownership records of digital items are stored on servers controlled by institutions – you must take their word for it.NFTs are compatible with anything built using Ethereum. An NFT ticket for an event can be traded on every Ethereum marketplace, for an entirely different NFT. You could trade a piece of art for a ticket!Companies with digital items must build their own infrastructure. For example an app that issues digital tickets for events would have to build their own ticket exchange.Content creators can sell their work anywhere and can access a global market.Creators rely on the infrastructure and distribution of the platforms they use. These are often subject to terms of use and geographical restrictions.Creators can retain ownership rights over their own work, and claim resale royalties directly.Platforms, such as music streaming services, retain the majority of profits from sales.Items can be used in surprising ways. For example, you can use digital artwork as collateral in a decentralised loan.
The NFT world is relatively new. In theory, the scope for NFTs is anything that is unique that needs provable ownership. Here are some examples of NFTs that exist today, to help you get the idea:
A unique digital artwork
A unique sneaker in a limited-run fashion line
An in-game item
An essay
A digital collectible
A domain name
A ticket that gives you access to an event or a coupon
POAPs (Proof of attendance protocol)
If you contribute to ethereum.org, you can claim a POAP NFT. These are collectibles that prove you participated in an event. Some crypto meetups have used POAPs as a form of ticket to their events. More on contributing.
How do NFTs work?
NFTs are different from ERC-20 tokens, such as DAI or LINK, in that each individual token is completely unique and is not divisible. NFTs give the ability to assign or claim ownership of any unique piece of digital data, trackable by using Ethereum's blockchain as a public ledger. An NFT is minted from digital objects as a representation of digital or non-digital assets. For example, an NFT could represent:
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Digital Art:
- GIFs
- Collectibles
- Music
- Videos
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Real World Items:
- Deeds to a car
- Tickets to a real world event
- Tokenized invoices
- Legal documents
- Signatures
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Lots and lots more options to get creative with!
An NFT can only have one owner at a time. Ownership is managed through the uniqueID and metadata that no other token can replicate. NFTs are minted through smart contracts that assign ownership and manage the transferability of the NFT's. When someone creates or mints an NFT, they execute code stored in smart contracts that conform to different standards, such as ERC-721. This information is added to the blockchain where the NFT is being managed. The minting process, from a high level, has the following steps that it goes through:
- Creating a new block
- Validating information
- Recording information into the blockchain
NFT's have some special properties:
- Each token minted has a unique identifier that is directly linked to one Ethereum address.
- They're not directly interchangeable with other tokens 1:1. For example 1 ETH is exactly the same as another ETH. This isn't the case with NFTs.
- Each token has an owner and this information is easily verifiable.
- They live on Ethereum and can be bought and sold on any Ethereum-based NFT market.
In other words, if you own an NFT:
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You can easily prove you own it.
- Proving you own an NFT is very similar to proving you have ETH in your account.
- For example, let's say you purchase an NFT, and the ownership of the unique token is transferred to your wallet via your public address.
- The token proves that your copy of the digital file is the original.
- Your private key is proof-of-ownership of the original.
- The content creator's public key serves as a certificate of authenticity for that particular digital artefact.
- The creators public key is essentially a permanent part of the token's history. The creator's public key can demonstrate that the token you hold was created by a particular individual, thus contributing to its market value (vs a counterfeit).
- Another way to think about proving you own the NFT is by signing messages to prove you own the private key behind the address.
- As mentioned above, your private key is proof-of-ownership of the original. This tells us that the private keys behind that address control the NFT.
- A signed message can be used as proof that you own your private keys without revealing them to anybody and thus proving you own the NFT as well!
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No one can manipulate it in any way.
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You can sell it, and in some cases this will earn the original creator resale royalties.
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Or, you can hold it forever, resting comfortably knowing your asset is secured by your wallet on Ethereum.
And if you create an NFT:
- You can easily prove you're the creator.
- You determine the scarcity.
- You can earn royalties every time it's sold.
- You can sell it on any NFT market or peer-to-peer. You're not locked in to any platform and you don't need anyone to intermediate.
Scarcity
The creator of an NFT gets to decide the scarcity of their asset.
For example, consider a ticket to a sporting event. Just as an organizer of an event can choose how many tickets to sell, the creator of an NFT can decide how many replicas exist. Sometimes these are exact replicas, such as 5000 General Admission tickets. Sometimes several are minted that are very similar, but each slightly different, such as a ticket with an assigned seat. In another case, the creator may want to create an NFT where only one is minted as a special rare collectible.
In these cases, each NFT would still have a unique identifier (like a bar code on a traditional "ticket"), with only one owner. The intended scarcity of the NFT matters, and is up to the creator. A creator may intend to make each NFT completely unique to create scarcity, or have reasons to produce several thousand replicas. Remember, this information is all public.
Royalties
Some NFTs will automatically pay out royalties to their creators when they're sold. This is still a developing concept but it's one of the most powerful. Original owners of EulerBeats Originals earn an 8% royalty every time the NFT is sold on. And some platforms, like Foundation and Zora, support royalties for their artists.
This is completely automatic so creators can just sit back and earn royalties as their work is sold from person to person. At the moment, figuring out royalties is very manual and lacks accuracy – a lot of creators don't get paid what they deserve. If your NFT has a royalty programmed into it, you'll never miss out.
What are NFTs used for?
Here's more information of some of the better developed use-cases and visions for NFTs on Ethereum.
I could go on and on, but from everything I have read, I will just summarize where I think NFT's can take us....IMO
In the Private Sector
- They can provide secure ownership that NOBODY CAN TAKE FROM YOU!
- They can provide privacy so NOBODY KNOWS HOW MUCH TAXES YOU SHOULD PAY!
- You can bundle multiple assets into one and then sell it...without the need for an underwriter.
- You can put your mortgage into one and sell it without the need for a bank to do the paperwork.
- You can put royalty agreements into something you sell so your family will continue to make money off of it every time it is bought/sold.
In the Public Sector
- They can secure a financial pool... like Social Security, from greedy Politicians robbing Peter to pay Paul.
- They can have secret beacons that alarm the Public of illegal activity.
- You can display Identification of a public figure to monitor their finances in real time.
My idea is to make it to where politicians and governments must ID themselves in all of their digital transactions and anyone who pays them or takes payment must ID themselves and their transaction history.... media too.
Literally, the sky is the limit.... Anything you can think of, it can do.
This is the opportunity for accountably and transparency to prosper for the Public Sector....and for Privacy to prosper for every Human on Earth.
What do I think RC is doing with NFT's?
I think he is creating a trading platform for them. With the team he has recruited, literally anything is possible. Matt Finestone, who is the previous head blockchain dev at Loopring, retweeted Jake Chervinsky's tweet where he claimed they are rebuilding the global financial system. Do I think Gamestop is going to be the new Market Makers? No....I think they will be the new Amazon of NFT trading. Because with NFT's, anyone can be a Market Maker. It is all about having something someone wants without having to deal with a 3rd party. NFT market places are a terminal...not a institution with deep pockets.
- side note - I just noticed Matt Finestone's Twitter avatar looks similar to the movie poster for Ready Player One. I recently wrote a crazy shit DD on how RC and Gamestop are using cryptic code by referencing pop culture from the movies Ready Player One and Wreck It Ralph. TL;DR documents needed to expose corruption are are hidden in the Uncensored Library found in the game Minecraft.....now back to this DD
For example, Whiskey Cask.....Whiskey Cask are where smart investors put their cash for safe keeping because the cask cannot be duplicated....unlike stocks and bonds. But like many other things in life, buying and selling can get expensive because of the 3rd party involved. Metacask saw this too and decided to create a blockchain trading platform for Whiskey Cask. How does it work? From their website, it reads...
The NFT represents your ownership of the cask. This will replace the certificate of ownership, which are generally issued by brokers, and is at times is used instead of the paper-based Delivery Order required to signify ownership to the storage facility (distillery or warehouse). The proof of ownership certificate is only as reliable as the brokers systems and ability have this available beyond insolvency. A NFT on blockchain provides a verifiable and transparent proof of ownership. Given the NFT represents your cask, and the ownership is recorded on the public blockchain, in the unlikely event of a broker insolvency, the liquidators can refer to the blockchain as a source of truth over the ownership of the cask. In this event, the NFT can be burnt and a delivery order executed to move the ownership at the facility level to your name. Once the NFT mechanism is widely adopted, there will no longer be a need for this, as the blockchain provides the record independent of the broker.
Now with all of this in mind, imagine doing this with gaming memorabilia, NFT art of characters, movie scenes, in-game Easter Eggs....anything you can dream of is possible. Imagine in 10 years having a hologram that plays of your favorite movie scene on loop...secured by an NFT...that no one else has. Imagine being able to invest your money into something like that. Imagine trying to sell your house and you throw in that hologram to sweeten the deal....all you would have to do is package the hologram NFT into the NFT of your house.
If I can see this now, RC could see this years ago. What exactly could he see? That hedgies are fukd'!!!
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