What is NFT? Learn from different aspects

Because I am often asked NFT-related questions by friends, and I like to systematically organize the knowledge I have learned, this article is regarded as my own study notes, and I try to explain it in vernacular as much as possible, and also provide a simple solution for future friends' questions. Solution: "You can read this article I wrote."

What is NFT, let's slowly understand it in several aspects.

The first aspect: what is the abbreviation for NFT?

NFT is Non-Fungible Token (translation: non-fungible token). I know that this sentence is the same as saying it, but having a "non-fungible token" means having a "fungible token". We can start by understanding "homogenized tokens" first.

"Fungible tokens" are simply our commonly used currencies. Suppose the central bank issues 10 billion new banknotes into the market, the one hundred yuan note in my hand is of the same value as your one hundred yuan note, and the same is true for cryptocurrencies, one of my bitcoins and one of yours Bitcoin is also worth the same. These tokens have exactly the same value, and can be split (0.1 for each of 10 people) or combined (1 plus 1 becomes 2).

"Non-fungible tokens" are different. Suppose someone issues 10,000 NFTs, each of which will be unique and cannot be divided (one NFT cannot be split into 0.5+0.5) and cannot be combined (buy two An NFT does not become an NFT twice as large (?)).

The second aspect: smart contracts

The issuance of "fungible tokens" and "non-fungible tokens" mentioned just now requires the deployment of "smart contracts" on the blockchain. You may have seen ERC-20, ERC-721, ERC-1155 these terms, these are the types of contracts, homogeneous tokens use ERC-20 contracts, and most non-fungible tokens currently use ERC-721.

When we buy NFT, we actually trade with a smart contract written and deployed on the blockchain by the project party: pay a fee and get a token. And each NFT can show a specific picture, in fact, because a mechanism has been written in this smart contract to specify that "a certain token will show a certain picture".

The third aspect: Let's use "art painting" as an example:

Why is the "Mona Lisa's Smile" hanging in the Louvre Museum in France worth more than what Xiao Ming printed at the printing house himself? Apparently they look exactly the same? !

Because what is in the Louvre is real, and what Xiao Ming prints is fake. But how to verify it?

The traces that Leonardo da Vinci painted with a brush hundreds of years ago made this piece of canvas a unique and unrepeatable object in this world. Even if imitators can draw exactly the same picture, experts can verify the difference from the traces of elements such as paint and canvas over time, which is equivalent to a physical guarantee that the original work cannot be reproduced.

In the Internet age, although the near-zero-cost "copy and paste" technology has brought us great convenience, it has also caused great trouble for artists. When he completes a work and publishes it (scanned, photographed or created directly on the computer and then published), this jpg file (a common image file format) basically cannot escape the fate of being copied and pasted by everyone, even if you want to The die-hard fans who support this artist may also feel that it is good to just right-click to download, why pay for it, after all, there is no cost to copy, and everyone can't tell which is the "original" and which is the "copy".

However, after the NFT technology of blockchain was born, artists can create a "NFT bound to the original" in the online world, claiming that the person who owns this NFT is the original owner. In this way, although everyone can easily right-click to copy a copy, they can't take this NFT as proof, and naturally they are not the owner, which creates the value of this NFT and makes iron fans willing to buy and collect.

Seeing this, smart friends should have discovered that the NFT we bought is actually a "certificate" to prove your transaction with this smart contract, and there will be a permanent public record on the blockchain. Tell everyone who the current owner of this "original certificate" is.

If you are a collector of boutique bags, it may be easier to understand the psychology of NFT buyers: the real one is almost the same as the AAA pirated one, why are people still willing to pay dozens or hundreds of times the price to buy the real one? Because there is the original factory guarantee, because there is a sense of honor, because the old lady can afford it.

The problem is that NFTs are so ugly now? Is the publisher also not the artist? How can it be so expensive, it must be hype!

well, the fourth aspect: let's use "club" as an example:

When buyers of a certain NFT know, communicate, interact with each other, and even generate more activities and added value spontaneously, everyone will find that the focus is not on the artistic value of the NFT image, but on "people who also own this NFT" ” , the energy, information, social interaction, opportunities, knowledge, sense of belonging, and even the evaluation of you from the outside world after buying this NFT in the community have become the reason why everyone buys a certain NFT.

Dr. Ge Rujunbao, a great OG character in Taiwan's NFT industry, talked about a mysterious Disneyland club "Club 33" in the Podcast "Baobo Friends Talk". Only 33 people in the world can own it, and can enjoy the highest priority of all the highest-level services in the park. There are only 33 places, there can be no more, and someone can withdraw to make up. This is a top club with a limited number of 33 places. Simply put, if you're part of this club, you're a coffee.

The issuance of NFT is also limited, and the feature that smart contracts cannot be modified once they are on the chain ensures its scarcity (the upper limit is written at the beginning, there are as many as possible, less issuance is possible, no additional issuance is possible), we often see some The price of NFT projects continues to soar, and the big reason is that people are willing to pay higher fees to buy this club membership card and squeeze into this small circle.

Foreign CryptoPunks, BAYC, Cool Cats NFT... etc. are all examples of very common and strong image design communities. There are also many well-known NFT projects oriented by "community" or "club" in Taiwan, and Each has its own characteristics, and I like a few of them myself (but let’s not give examples 😆)

The fifth aspect: additionally assigned functions

In fact, in addition to the pure artistry and club membership card mentioned above, the most common value of NFT is the added value provided by the project party after buying it, that is, "empowerment".

A few real cases:

A certain parking lot chain brand has launched to buy NFTs to get parking discounts, car merchandise and insurance discounts, and it is even possible to draw special cards to get free parking for life.

A metaverse music brand launches NFT, and holders can participate in all aspects of music distribution decisions and some type of distribution of profits.

An artist launches a personal NFT project, and the holder can enjoy discounts on concert tickets, physical activities, the artist's catering sideline, and even a year's distribution of brokerage income.

A well-known salt-fried chicken store issues salt-fried chicken NFT, and the owner can exchange the corresponding food at the physical store for free according to the frequency and time specified by the store.

A well-known game turns virtual treasures such as props, weapons, and characters into NFTs, which means that the ownership of the treasures is completely delegated to the players, allowing players to buy and sell them privately or on a trading platform.

The above are just the forms that have impressed me recently, but whether this type of empowerment has legal effect, if it is not performed later, whether there is a complaint channel, whether the issuing project party has the power to adjust the content, and whether the distribution of profits will involve Issues such as restrictions on securities laws and regulations have not yet been clearly regulated. At present, we can only continue to observe and believe in the project party with the belief that human nature is inherently good.

Sixth, seventh, eighth... facet?

I believe that there will be more forms and applications of NFT in the future. I am amazed and excited every day after I come into contact with this world. I also believe that blockchain technology will greatly change our lives in the future, so I strongly recommend Everyone, you may not need to invest, but you must understand.

The above is the content of this article to share with you. I very much hope that you will leave a message to interact with me and teach and learn together. Finally, let me say something I often hear, DYOR (Do Your Own Research), one day in the currency circle, one year in the world, the above only represents the situation when I wrote this article, I suggest you read this article according to your current situation. make judgments.