#NFTs are everywhere. They are set to revolutionise industries from music to gaming and from fashion to banking.
But, WTF actually are NFTs? 🤷
But, WTF actually are NFTs? 🤷
👨💻The concept of digital #cryptographic assets isn't actually that new and can be traced all the way back to 1993.
The first "modern" NFT, called Quantum, was created on the Namecoin blockchain in 2014.
The first "modern" NFT, called Quantum, was created on the Namecoin blockchain in 2014.
🪨 The actual explosion in popularity came in 2017 with the release of now iconic #CryptoKitties, #EtherRocks and Punks.
These + other collections paved the way for the NFTs as we know them, but they lacked one thing - a common standard.
(EtherRocks were selling upwards of $1m)
These + other collections paved the way for the NFTs as we know them, but they lacked one thing - a common standard.
(EtherRocks were selling upwards of $1m)
📓The unified format came in 2018 when ERC-721 was introduced.
It standardized, among other things, the ways NFT ownership is recorded, and transfers happen. It also solidified the term NFT itself.
It standardized, among other things, the ways NFT ownership is recorded, and transfers happen. It also solidified the term NFT itself.
🗺️Ultimately, NFTs are smart contracts that record who owns what. They do that by mapping an ID of each NFT in the collection to the user address.
When you transfer your NFT, this mapping is simply updated to a new owner.
When you transfer your NFT, this mapping is simply updated to a new owner.
💿 But NFTs are more than just IDs on a #blockchain. Usually, we see them as pictures or other media files with multiple properties or traits.
So, where do those come from?
All this information can be stored on a blockchain, but that's expensive and unnecessary complicated.
So, where do those come from?
All this information can be stored on a blockchain, but that's expensive and unnecessary complicated.
🧑💼The second option is to store it on a centralised server, as was the case with Quantum.
The problem with that approach is that the server owner can suddenly decide to stop hosting the data or arbitrarily change it.
The problem with that approach is that the server owner can suddenly decide to stop hosting the data or arbitrarily change it.
Finally, collections can store their data on #Decentralised systems like IPFS, which can prevent any one actor from being able to control it.
For example, that's how @joepegsnft stores information for collections it launches.
👨💻 Click to view code:
For example, that's how @joepegsnft stores information for collections it launches.
👨💻 Click to view code:
🛣️There is still a lot of ongoing research and discussion ongoing in the space (e.g., around Soulbound Tokens). but hopefully, this thread helped you better understand WTF NFTs actually are.
Tune in next week to learn about other token standards besides ERC-721!
Tune in next week to learn about other token standards besides ERC-721!
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