6 ms·

Would someone explain an NFT to me, as an adult (not ELI5)? I keep reading stories like this and don’t understand why it would be valued at 500k

ufo 5y ago
I also don't get it. An NFT is basically a small piece of text on the blockchain saying that you own the thing at a given URL. It doesn't mean you have copyright over the relevant intelectual property. There's nothing stopping the URL from returning a 404 at some point. And anyone can create an nft of anything, even if they don't actually own the intelectual property. It really is as crazy as it sounds. The closest real world analogy I've seen is that it's like the people who sell deeds for plots of land on the Moon.
- jwilk 5y ago
  What's the URL for this particular NFT?
  - js2 5y ago
    The info is linked to from here: https://foundation.app/DisasterGirl/disaster-girl-25046 https://foundation.app/DisasterGirl/disaster-girl-25046 Here's the token: https://etherscan.io/token/0x3b3ee1931dc30c1957379fac9aba94d1c48a5405?a=25046 https://etherscan.io/token/0x3b3ee1931dc30c1957379fac9aba94d... What's burned into the blockchain is the URL of a JSON file which is hosted on IPFS: https://ipfs.io/ipfs/QmYBvcJMaYFrUwhTRcbiHqFBoYPP54t4aBCnk1KEv5n4tc/metadata.json https://ipfs.io/ipfs/QmYBvcJMaYFrUwhTRcbiHqFBoYPP54t4aBCnk1K... That in turn points to the image, also hosted on IPFS: https://ipfs.io/ipfs/QmeQ6c5HdnEDcheHmWuKWdwMHBBZg1eGpgV5h3H2MyvdzR/nft.jpg https://ipfs.io/ipfs/QmeQ6c5HdnEDcheHmWuKWdwMHBBZg1eGpgV5h3H... Here's the transaction which minted the token with the IPFS URL of the metadata as input: https://etherscan.io/tx/0xccc3f7ee08307dd469af7c65c55e087edc45ed9dbf716511d4c3e31643c0574a https://etherscan.io/tx/0xccc3f7ee08307dd469af7c65c55e087edc... More about hosting NFT content on IPFS here: https://docs.ipfs.io/how-to/mint-nfts-with-ipfs/#a-short-introduction-to-nfts https://docs.ipfs.io/how-to/mint-nfts-with-ipfs/#a-short-int... As to NFTs themselves, you’ll have to understand Etherium smart contracts. This particular NFT is a Foundation NFT which implements the ERC-721 interface: http://erc721.org/ http://erc721.org/ (Except the underlying contract actually appears to be https://docs.zeppelinos.org/docs/1.0.0/upgradeability_adminupgradeabilityproxy https://docs.zeppelinos.org/docs/1.0.0/upgradeability_adminu... which I understand to be a contract that proxies its implantation. I’m not entirely clear how that works.)
wepple 5y ago
Digital data (IE an image) is fungible; it can be copied at near zero cost. NFTs (Non-Fungible Tokens) use the blockchain to “claim” ownership by being a single non-replicatable representation of that digital data. In reality, it’s value is entirely dependent on people believing NFTs have value & that there’s only one blockchain in which they should exist.
- wepple 5y ago
  I’ll add that whilst I’ve provided a somewhat technical definition, as to the logical reason someone would pay that amount of money: no idea whatsoever. I guess they’re hoping that these things retain and even increase in value. At some point in history we decided that ink on canvas could be immensely valuable based on scarcity (arguable also they’re nice to look at, unlike an NFT), and I’m guessing they hope the same for NFTs. I guess memes are highly recognizable works of art to some?
  - user-the-name 5y ago
    The logical reason is: To pump prices because you are running a scam. https://twitter.com/FoldableHuman/status/1387956657171271681 https://twitter.com/FoldableHuman/status/1387956657171271681
    - lugorrr 5y ago
      By this logic, pretty much every asset you can buy with money is a scam. I'd rather say NFTs and money are social constructs.
      - user-the-name 5y ago
        By what logic is that? I do not see any logic anywhere here that would imply any such thing.
  - usrusr 5y ago
    “as to the logical reason someone would pay that amount of money: no idea whatsoever.“ One possible motivation: they see themselves in a position to benefit from NFT trading "becoming a thing". Either because they already own stock, or they expect themselves to become extraordinarily successful in speculation, or they consider themselves future creators, or they own/run a market where they will be traded. No matter which it was, they'd have a very real interest in bootstrapping the market into existence. Pass around ownership in an effectively zero sum series of transactions with exponentially growing price, get media attention, stop being zero sum as soon as the first outsider steps in.
brazzy 5y ago
It's basically the bastard child of cryptocurrency and modern art. Technical hype + cultural hype + FOMO = $$$$$
werdnapk 5y ago
Just go find an original meme image, claim it to be yours and sell it as an NFT. Profit!
throwaway3699 5y ago
It's like a trendy type of signature.
jwr 5y ago
This explanation making rounds on Twitter is actually pretty good: https://twitter.com/yogthos/status/1387570034139140102 https://twitter.com/yogthos/status/1387570034139140102 As for being an adult and not getting ELI5, see the last paragraph in that explanation. Yes, I am serious.
- jwilk 5y ago
  Source: https://queersamus.tumblr.com/post/649552477605249025 https://queersamus.tumblr.com/post/649552477605249025
drran 5y ago
It's journal. Alice pays Bob 500 000 USD. Alice owns Bob soul. Record checksum: 0x3345dfe3. Journal checksum: 0x3345dfe3 Charlie pays Bob 500 USD. Charlie owns Bob meme. Record checksum: 0x1305eee5. Journal checksum: 0x995faac2 And so on.
raesene9 5y ago
The description here https://twitter.com/charlottejee/status/1387722711766650884?s=20 https://twitter.com/charlottejee/status/1387722711766650884?... , whilst snarky, seems like a reasonable summary.
codeulike 5y ago
There is an art market, people (dont ask me why) pay a lot of money for art and 'invest' in it, hoping things will go up. Originals have value - e.g. the original Mona Lisa will always be worth more than any copy, even if that copy was accurate down to the atomic level. Or an original banksy spray painted on a wall is worth lots of money ... if you took the exact same stencil he used, and sprayed your own version, it would be worth much less. NFTs are an attempt to translate that into digital form. An artist will 'mint' an NFT (I think its based on a hash of the actual digital image/video whatever?) and then that 'minted' NFT is embedded in a blockchain and can be bought and sold. It is perceived to have value because its endorsed by the original artist. Yes NFTs are weird but so is a lot of the real world art market, decades ago Yves Klein could paint a canvas pure uniform blue and people paid crazy money for that stuff.
- pjc50 5y ago
  I quite like the IKB canvases because they're outside the normal colour gamut; if you have an opportunity to see one in person you'll understand, because the colour cannot be accurately represented on screen or in a photograph. A neat trick. But I still can't see how it's worth millions.
domatic1 5y ago
It's a url of an image written on an array inside a smart contract. Something like nft_owner["http://cloud.com/meme.jpg http://cloud.com/meme.jpg"] = address The owner of that address has the permission to interact with that smart contract, only he can transfer it. Basically a type of ownership written on the blockchain that is all.
- azemetre 5y ago
  Are you allowed to profit off the ownership? Like put the NFT on physical media (shirts, stickers, etc) or license it to others?
  - pjc50 5y ago
    No, the copyright doesn't (automatically) go with it, and there's basically zero legal-system recognition of NFTs.
maxerickson 5y ago
The buyer likely has lots of the cryptocurrency used in the purchase and is likely either trying to promote use of it or launder money.
ashtonkem 5y ago
You can purchase a signed link that proves you “own” the link. It confers no other rights or capabilities typically part of ownership. It’s expensive because anything crypto currency related is filled to the brim with fraud, money laundering, and “number go up” groupthink.
globular-toast 5y ago
Imagine I have a bit of paper and I tell you in 3 years time, someone will want to buy this piece of paper for 10 million. I will sell it to you for 1 million now. If you believe me, it would be stupid to decline this offer. Here it's explained in comedy form: https://www.youtube.com/watch?v=ZiJa9diJOMk https://www.youtube.com/watch?v=ZiJa9diJOMk You can also watch the film The Big Short for another view into finance. The most important thing to grasp is, don't think this can't be true because it's so stupid. It's exactly as stupid as it sounds. For a more serious look, listen to John Kay: https://www.youtube.com/watch?v=SX3E-CbY1uE https://www.youtube.com/watch?v=SX3E-CbY1uE Or read the corresponding book Other People's Money.

ufo 5y ago

I also don't get it. An NFT is basically a small piece of text on the blockchain saying that you own the thing at a given URL. It doesn't mean you have copyright over the relevant intelectual property. There's nothing stopping the URL from returning a 404 at some point. And anyone can create an nft of anything, even if they don't actually own the intelectual property. It really is as crazy as it sounds. The closest real world analogy I've seen is that it's like the people who sell deeds for plots of land on the Moon.

jwilk 5y ago
What's the URL for this particular NFT?
- js2 5y ago
  The info is linked to from here: https://foundation.app/DisasterGirl/disaster-girl-25046 https://foundation.app/DisasterGirl/disaster-girl-25046 Here's the token: https://etherscan.io/token/0x3b3ee1931dc30c1957379fac9aba94d1c48a5405?a=25046 https://etherscan.io/token/0x3b3ee1931dc30c1957379fac9aba94d... What's burned into the blockchain is the URL of a JSON file which is hosted on IPFS: https://ipfs.io/ipfs/QmYBvcJMaYFrUwhTRcbiHqFBoYPP54t4aBCnk1KEv5n4tc/metadata.json https://ipfs.io/ipfs/QmYBvcJMaYFrUwhTRcbiHqFBoYPP54t4aBCnk1K... That in turn points to the image, also hosted on IPFS: https://ipfs.io/ipfs/QmeQ6c5HdnEDcheHmWuKWdwMHBBZg1eGpgV5h3H2MyvdzR/nft.jpg https://ipfs.io/ipfs/QmeQ6c5HdnEDcheHmWuKWdwMHBBZg1eGpgV5h3H... Here's the transaction which minted the token with the IPFS URL of the metadata as input: https://etherscan.io/tx/0xccc3f7ee08307dd469af7c65c55e087edc45ed9dbf716511d4c3e31643c0574a https://etherscan.io/tx/0xccc3f7ee08307dd469af7c65c55e087edc... More about hosting NFT content on IPFS here: https://docs.ipfs.io/how-to/mint-nfts-with-ipfs/#a-short-introduction-to-nfts https://docs.ipfs.io/how-to/mint-nfts-with-ipfs/#a-short-int... As to NFTs themselves, you’ll have to understand Etherium smart contracts. This particular NFT is a Foundation NFT which implements the ERC-721 interface: http://erc721.org/ http://erc721.org/ (Except the underlying contract actually appears to be https://docs.zeppelinos.org/docs/1.0.0/upgradeability_adminupgradeabilityproxy https://docs.zeppelinos.org/docs/1.0.0/upgradeability_adminu... which I understand to be a contract that proxies its implantation. I’m not entirely clear how that works.)

wepple 5y ago

Digital data (IE an image) is fungible; it can be copied at near zero cost. NFTs (Non-Fungible Tokens) use the blockchain to “claim” ownership by being a single non-replicatable representation of that digital data. In reality, it’s value is entirely dependent on people believing NFTs have value & that there’s only one blockchain in which they should exist.

wepple 5y ago
I’ll add that whilst I’ve provided a somewhat technical definition, as to the logical reason someone would pay that amount of money: no idea whatsoever. I guess they’re hoping that these things retain and even increase in value. At some point in history we decided that ink on canvas could be immensely valuable based on scarcity (arguable also they’re nice to look at, unlike an NFT), and I’m guessing they hope the same for NFTs. I guess memes are highly recognizable works of art to some?
- user-the-name 5y ago
  The logical reason is: To pump prices because you are running a scam. https://twitter.com/FoldableHuman/status/1387956657171271681 https://twitter.com/FoldableHuman/status/1387956657171271681
  - lugorrr 5y ago
    By this logic, pretty much every asset you can buy with money is a scam. I'd rather say NFTs and money are social constructs.
    - user-the-name 5y ago
      By what logic is that? I do not see any logic anywhere here that would imply any such thing.
- usrusr 5y ago
  “as to the logical reason someone would pay that amount of money: no idea whatsoever.“ One possible motivation: they see themselves in a position to benefit from NFT trading "becoming a thing". Either because they already own stock, or they expect themselves to become extraordinarily successful in speculation, or they consider themselves future creators, or they own/run a market where they will be traded. No matter which it was, they'd have a very real interest in bootstrapping the market into existence. Pass around ownership in an effectively zero sum series of transactions with exponentially growing price, get media attention, stop being zero sum as soon as the first outsider steps in.

brazzy 5y ago

It's basically the bastard child of cryptocurrency and modern art. Technical hype + cultural hype + FOMO = $$$$$

werdnapk 5y ago

Just go find an original meme image, claim it to be yours and sell it as an NFT. Profit!

throwaway3699 5y ago

It's like a trendy type of signature.

jwr 5y ago

This explanation making rounds on Twitter is actually pretty good: https://twitter.com/yogthos/status/1387570034139140102 https://twitter.com/yogthos/status/1387570034139140102 As for being an adult and not getting ELI5, see the last paragraph in that explanation. Yes, I am serious.

jwilk 5y ago
Source: https://queersamus.tumblr.com/post/649552477605249025 https://queersamus.tumblr.com/post/649552477605249025

drran 5y ago

It's journal. Alice pays Bob 500 000 USD. Alice owns Bob soul. Record checksum: 0x3345dfe3. Journal checksum: 0x3345dfe3 Charlie pays Bob 500 USD. Charlie owns Bob meme. Record checksum: 0x1305eee5. Journal checksum: 0x995faac2 And so on.

raesene9 5y ago

The description here https://twitter.com/charlottejee/status/1387722711766650884?s=20 https://twitter.com/charlottejee/status/1387722711766650884?... , whilst snarky, seems like a reasonable summary.

codeulike 5y ago

There is an art market, people (dont ask me why) pay a lot of money for art and 'invest' in it, hoping things will go up. Originals have value - e.g. the original Mona Lisa will always be worth more than any copy, even if that copy was accurate down to the atomic level. Or an original banksy spray painted on a wall is worth lots of money ... if you took the exact same stencil he used, and sprayed your own version, it would be worth much less. NFTs are an attempt to translate that into digital form. An artist will 'mint' an NFT (I think its based on a hash of the actual digital image/video whatever?) and then that 'minted' NFT is embedded in a blockchain and can be bought and sold. It is perceived to have value because its endorsed by the original artist. Yes NFTs are weird but so is a lot of the real world art market, decades ago Yves Klein could paint a canvas pure uniform blue and people paid crazy money for that stuff.

pjc50 5y ago
I quite like the IKB canvases because they're outside the normal colour gamut; if you have an opportunity to see one in person you'll understand, because the colour cannot be accurately represented on screen or in a photograph. A neat trick. But I still can't see how it's worth millions.

domatic1 5y ago

It's a url of an image written on an array inside a smart contract. Something like nft_owner["http://cloud.com/meme.jpg http://cloud.com/meme.jpg"] = address The owner of that address has the permission to interact with that smart contract, only he can transfer it. Basically a type of ownership written on the blockchain that is all.

azemetre 5y ago
Are you allowed to profit off the ownership? Like put the NFT on physical media (shirts, stickers, etc) or license it to others?
- pjc50 5y ago
  No, the copyright doesn't (automatically) go with it, and there's basically zero legal-system recognition of NFTs.

maxerickson 5y ago

The buyer likely has lots of the cryptocurrency used in the purchase and is likely either trying to promote use of it or launder money.

ashtonkem 5y ago

You can purchase a signed link that proves you “own” the link. It confers no other rights or capabilities typically part of ownership. It’s expensive because anything crypto currency related is filled to the brim with fraud, money laundering, and “number go up” groupthink.

globular-toast 5y ago

Imagine I have a bit of paper and I tell you in 3 years time, someone will want to buy this piece of paper for 10 million. I will sell it to you for 1 million now. If you believe me, it would be stupid to decline this offer. Here it's explained in comedy form: https://www.youtube.com/watch?v=ZiJa9diJOMk https://www.youtube.com/watch?v=ZiJa9diJOMk You can also watch the film The Big Short for another view into finance. The most important thing to grasp is, don't think this can't be true because it's so stupid. It's exactly as stupid as it sounds. For a more serious look, listen to John Kay: https://www.youtube.com/watch?v=SX3E-CbY1uE https://www.youtube.com/watch?v=SX3E-CbY1uE Or read the corresponding book Other People's Money.