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NFT's ?

Updated: Dec 1, 2021

So your mom just asked you what an NFT is and you have no idea how to explain this. Don't worry I'll be breaking it down for both of you right now. This isn't a super technical explanation, this is just an example for absolute beginners.

So right now we live in a digital world where digital things can be replicated free of charge. It takes no money or effort to right click on an image copy and paste it, same goes for video. It takes zero to no effort to download it and replicate it as many times as you want.

So how can we possibly make things valuable if they can be replicated infinitely? How can we make something digital scarce? This is where NFT’s come in. NFT stands for non-fungible token so here is an example to help you understand.

Imagine I drew a picture of a cat that I wanted to show everybody in my class. I said hey everybody look at my picture. I'm going to pass it around the class so that everybody can see it, however when I passed the image around to each person I asked them to sign their name on the back so I know who handled the image. I asked everybody to sign their name in permanent marker and before I passed it around, I'm going to sign my name first so that everybody knows that I created it.

So let's imagine all the classmates are passing around the image and they each sign their name on the back as well. And then about half way through it lands on “Tommy.” Tommy likes the image so much that he wants to keep it for himself. So what he does is he pulls out another piece of paper and he traces my image attempting to replicate it, he's able to replicate it so well that you can't even tell the difference and Tommy decides to keep the original image for himself and continues passing around the fake image to the rest of the class.

Now remember the original image had all the signatures of the people who handled it previously and the fraudulent image does not. So by the time the fraudulent image reaches me it has maybe half of the signatures it should including my original signature therefor because of the ledger on the back I am able to verify that this is not the image I sent out because the ledger has about half the signatures as it should. I am able to verify that I didn't receive my original image back, not only that but everybody else can see the manipulated ledger too so they also know that it's not the original image. That is basically the essence of NFT's. It is a digital ledger that can not be manipulated to let people know where the digital asset has been. Most importantly who owns the image, this way we are able to prove that an image, a video, a piece of music is indeed the original therefor giving it the value it deserves.

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