NFTs, Explained


– Now to the latest trendthat’s sweeping the internet. – So announced NFT. -[ Reporter] They’re nowselling for massive horses. 69 million dollars. – So what’s behind this latest manium? – That is the question to ask. – Okay, so there’s somesuper strange nonsense happening online right now, and I need to tell you about it. First, look at this tweet. The first tweet ever tweetedin the history of Twitter. The tweet was by Jack Dorsey. – I’m one of the co-founders of Twitter. – And this tweet wassomehow just acquired for $ 2,915, 835.47. -( laughter) You serious? – And it’s not just a tweet.Just last month a single jpegsold for 69 million dollars. The NBA is selling littlemoments of basketball games for hundreds of thousands of dollars. This is all sorts of digital things that people are purchasinga version of them for lots of money. There are three simple lettersthat you need to understand to understand what’s going on here. Those characters are NFT. – Now to the latest trendthat’s sweeping the internet. – What is exactly is an NFT? – So called NFT. – Do you all in the chatunderstand what an NFT is? – Does that stand for not safe for design? What does this intend? – Why would you pay for an NFT when you can look at it for free? – Is this a big bubblejust waiting to burst? – I believe in this spacewith my entirety heart.- I’m just mesmerized by it, all of it. – This story is much bigger than a $600,000 cat gif. Or a three million dollar tweet. It’s a story about human psychology and how the practice wevalue things is altering because of technology. A engineering that some people ponder may revolutionize our society, while at the same timeaccelerating the climate disaster. It’s really nuts, it’s allof these things together and I wanna explain itto you, so let’s do this. Now what the hells an NFT Apparently cryptocurrency Everyone’s performing some money -[ Announcer] Oh that was insane officially foolish Lebron James. – NFT stands for non fungible token. Okay, there it is, that’s the explain. Non fungible token, manufactures ability right? The video’s over now. No, one of my issues with this topic is that beings throw aroundthings like blockchain, crypto artistry, record, NFT, and they are only expect me to understand what they’re talking about, and I didn’t.Okay, I’m gonna talk abouta Tesla for a few seconds. Customized by Unplugged Performance to be the most unique andhigh quality Tesla there is. Oh and it’s not just a Tesla, it’s also $20,000. You can enroll for achance to win the Tesla and $20,000 by going toOmaze.com/ JohnnyHarris. When you bequeath $10 or more, your gift goes tosupport two non-profits. 501 C3 is the first one. They are an organization that seeks to mobilize the next generationto fight climate change by creating a global community that cuddles low-pitched carbon culture. The other one is called Give Power which seeks to give clean drinkable ocean to the 2.2 billion people various regions of the world who is not have safeaccess to clean-living spray. The non-profit works itsdeep solar knowledge to superpower and accommodate cleanwater, menu defence, and dawn to fields around the world.So to potentially prevail a Tesla and $20,000, and to support these organizations going to see Omaze.com/ JohnnyHarristo find out more. So, fungible, let’s talk about the word fungible. It’s this very specific oath that economists use, it has a very precise definition. I wanna application a different wordfor fungible for a few seconds. Let’s just use the word replaceable. Non-fungible intends non-replaceable, you can’t supplant it, there’sonly one of them, it’s unique. Non fungible. Let me give you an example of something I feel very strongly about. Let’s say you want tobuy an orange jacket.This is really absurd, I’ve actually never counted these before. – Stop it, be helped. – You wanna buy an orangejacket from Uni Qlo. You go on the internet, and a casing expenses $39. If you are buying one ofthese cases for $39, you don’t care what specificjacket they be transmitted to you, they’re gonna become thousandsof casings in your width, send them to places, send them to beings, and they will send one to you, you don’t care which one it is. The coat is fungible, it’s replaceable. As long as you get onethat’s identical to the rest, it’s worth the same to you, they’re interchangeable. Nonetheless, let’s talk aboutone Uni Qlo orange skin that has been with mefor a very long time. This is the original, and for those of you who don’t know I sort of have a strangeattachment to this jacket. I really love it, I adoration the colouring, I feel like an identity with this thing. And it’s sort of starting to disintegrate, but I cherish it.And I kind of fell in love. This jacket is not replaceable. If I went onto the website and paid $39 for a Uni Qlo orange skin that was this accurate same modeling, it have not been able to this skin. This coat is non-fungible. It is the only one onthe planet that exists. It has psychological cost. It has implication. It is a very valuablething because it is scarce. There is only one of them, it’s valuable to me at least. And I kind of fell in love. Okay, we are able to put these down for a second. Everything in our economyis one or the other, fungible or non-fungible. A sack or rice is fungible, you exactly require a sack of rice, you don’t care which one it is. The Mona Lisa , non-fungible, there’s only one. Unsurprisingly , non-fungible the picture is nature more valuablethan fungible things.To that’s the NF in NFT , non-fungible. Now let’s talk aboutthe T, which is token. This is a terribly internet-y word. And to explain this, Ihave to explain something I have avoided explainingfor a long time, the blockchain. Luckily, there’s a way to understand this, and I’m going to make itas painless as is practicable. Let’s say I want to buythree slices of pizza from my friend Anna. She accuses me six dollarsfor these three wedges. I don’t use cash anymore, so I draw out my debit card, my bank card, and I swipe on her little terminal. As soon as I swipe this carda word is sent to my bank and it says hey, Johnny, whohas an account at your bank wants to spend six dollars on pizza, and that fund needs to go to Anna’s bank. This is like the bread andbutter of what a bank does, all day, they substantiate every transaction that comes in from all their patrons, they send out money to the other banks, and at the end of the day they have a tally of all the money that went out of youraccount and into your detail and they can give you a number.They can say based on allof these transactions, you have $ 50 in your bank account. And so when that requestcomes in as I swipe my poster my bank is like okay, based on all of your business you have $ 50 in your history, I can send six dollarsto Anna’s bank, approved. And they approve the transaction. Once that money comes into Anna’s bank, Anna’s bank is doing the same thing. They’re like oh cool, she had $ 80 and now she has $ 86, and they supplement it to her record. More and more your fund isjust a number on a screen. It’s the result of abunch of events. You don’t barter with physical things, you don’t use cash so much better. So the bank continuing thorough the recording of every transactionbecomes really important. We trust the bank to do this correctly. So thank you banks. Banks and other midriff servicemen ought to have remaining stufflike this running smoothly for centuries. I intend kind of smoothly. -[ Reporter] The NASDAQ, everything and more has been completely wiped out. -[ Reporter] It was theworst era on Wall Street.- What in the world ishappening on Wall Street? – There have been a few bumps in the road. With the rise of the internet, people started to wonder. Is there a highway that wecould do this same thing, coordinate this same transaction of transfer of money betweentwo parties without the bank? The answer is a very cleverconcept called the blockchain. The blockchain. The blockchain fulfills thesame thing the bank was doing, but instead of doing thisprivately on my bank account and talking to Anna’s bank, all of the transactionsare actually recorded publicly on the internet. You’re going surfing on the internet So let’s redo thisexample in a crypto world-wide. Anna charges me six crypto coins for my three slicings of pizza. I go to swipe my proverbial bank card to say yes, I want to pay you six coins. Instead of the bank seeingthat request for a transaction and trying to validate it, it goes on to this public record where a assortment of people’s computers all around the world are keeping track of every single transactionof everyone ever. If I don’t indeed have thesix coins in my account to pay Anna, all of the people’s computers who are keeping track ofevery single transaction will notice that there’s a divergence. They’ll be like whoa whoa whoa dude, you don’t have six coppers. We’re looking at every transaction ever and you don’t have six coins. Your transaction is rejected.If I do have six silvers, all of the computerslooking at the public record will see that request for a transaction and they’ll be like yep, approved. You have six coppers andnow Anna has six silvers. And they’ll write that transactioninto the public record. Now Anna having those six extra coppers is now the business of everybody, everybody now knows that. The site here is that the group checks the legitimacy of every event by deter an look on every transaction to make sure that it supplements up. Okay I’m getting sizzling at this object, so I’m taking off my orange casing. Okay, so you’re wondering what does the blockchainand this public record have anything to do with cat gifs that sell for $600,000? Well I’m about to tell you. So in my pizza pattern wetalked about blockchain as a nature to verify currency transaction. I compensate you so much better, you pay me this much and everybody knows how much everybody has because it’s all public.But this is where it starts to bend my thought a little bit, what if we apply this to something that isn’t money or currency? Let’s say one day you’rejust looking at the ledger and the ledger’s like Johnny wants to give Anna six coins. Okay he’s got six coins, approved. And then a transaction comes up that’s like a Malaysian businessman wants to give three million dollars worth of coins to Jack Dorsey in exchange for a little token, or digital certificate that feels that the tweet is now somehow owned by the Malaysian businessman. The only thing that theblockchain to be concerned about is does the Malaysian businessman have three million dollars worth of silvers? And so a assortment of computersall around the world look at the whole entirelist of events and say like yeah, this guy has more than three million dollarsworth of silvers, approved. They approve the transaction, and now it is written in a public record that is unalterable that says that this Malaysianbusinessman owns this tweet.The token has beentransferred to somebody brand-new , non-fungible token, NFT. And if there’s anythingthat gets human psychology to value something, it’s if an part groupvalidates that it’s real and that there’s only one of them. There are tens of thousandsof NFTs of all kinds. Some music is being given tokens, lots of art is being minted as tokens and being bought and sold, and then of course there’s. – NBA Top Shot. – Who’s taking advantage of this. – These highlight moments, these Top Shot minutes fromyour favorite NBA participates have been turned into non-fungible tokens. – Jesse attained headlines the other day when he paid $208,000 fora Lebron James Top Shot. – It’s the weirdest thing. As soon as humen have enough abundance to have their basic needs met, food, shelter, cordiality, et cetera, the next territory is to create value in things that have no inherent price. The quality is transformed into mental hype.Excitement around a certain thing. We’ve been doing that forever, I make the whole art industry is based on the idea of a bunch of people deciding that this painting, this little bit ofcanvas and grove and draw is valuable, and thus it is valuable. The only different about now is we now have information and communication technologies to do this in a non-physical way expend this very sophisticatedinternet engineering that is growing very quickly. Okay, so this is a lot of publicity, and I know you’re thinking like cool, there’s a knot of rich people online buying and trading digital art, and there’s millions ofdollars worth of placards, I thought you said that this was gonna have the potentialto change the world. And I’m getting there, but first I need to talk about the crazyflip side to the NFT fad. The world is that the technology that is the backbone for all of this, the blockchain substance thatwe’ve been talking about relies on the public ledgerthing that I talked about.That is the sort of heartand soul conceptually, but mechanically, like physically what it relies on is computers doing a cluster of little forecasts all day and night forever. These computers aren’t real computers, they don’t have any remembering, or screens, or anything. All they do is just makelittle micro-calculations all day, all darknes. Most NFTs are stored on ablockchain announced Ethereum.And as of now, in early April2 021 when I’m filming this, the Ethereum blockchain is using 33 terawatt hours of electricity. And you’re like what’s aterawatt hour of electricity? That’s the same extent of capability as the country of Serbia. A remember that produce electricity usually comes from power plants that are burningfossil-fuels, that are putting carbon into the atmosphere which is a big freaking problem. -[ Narrator] Facing a manmadedisaster on a global scale. – The power consumptionof the Ethereum blockchain is exploding, it quadrupledin the like eight months, and it is showing no mansion of slowing down.It got a lot of energy. And to think that that much energy is not being used tolike, move people around or grow things, it’s used to crunch numbers in a eerie computer warehouse somewhere so that somebody can buy a bogu token of a thing that we only, oh gentleman, I can’t, it’s spirit blowing. It’s such an sarcastic time where it’s like this is all digital, it’s all hoax, it’s not real, but it’s having profoundly real world accomplishes. I exactly wanna finish this video now, talking about what this might mean for our world going forward. This is definitely hype, and that’s the whole point. I signify these speculationmarkets are all about hype.We see this all the timewith new technologies and brand-new things thatpeople get excited about. And they crowd it with their financings and the premium goes up, and then something happens, for example. – Come on Uncle Phil, this is the’ 90 s man. – What’s a web page, something ducks accompany on? – How nice of you to join us. – On equal value, so cashin on today’s brand-new economy. – It’s the’ 90 s, it’s hammer time. – In the’ 90 s the internet was taking off and parties were just realizing that you could make money on the internet. You could induce bigbusinesses on the internet. The stock market wassurging, 400% in five years mainly fueled by so muchhype and feeling around these brand-new internet companies. -[ Reporter] Break the recordas America’s longest boom.- The new economy, is a boom without end? – This rise peaked in March of 2000, and then the bubble flare, and a good deal of thesecompanies either get under or completely lost all ofthis excitement valuation that they had. – Saw it didn’t you, it was down some. – But, did that mean thatthe internet went away? Did that means that internetbusinesses didn’t come back? No, fellowships went onto reshape our world. Right now I think we are probably in that stage of NFTs. It’s publicity, it’s novel, it’s exciting, but what it’s doing isit’s propagandizing our brains to think differently about how we confirm and check things.If I buy a room, there is a whole thick stack of paperworkand a cluster of middlemen to make sure that it is very clear who owns the house, and how that coin does moved from one person to another. It is a nightmare of an experience. If abruptly technologyexisted that make apart the centralized midriff man and constituted deals between beings able to be authenticated, verifiable, and much smoother, thatcould change our world. I’m not here to say ifthe bubble’s gonna burst, or whatever, I don’t know.I just know that this is a crazy moment where we’re getting ourheads around a new technology and what it means, and eventually will change. This won’t be crazy, thiswon’t be tale anymore, tolls will go down, but the technology thatallowed it all to happen will probably stick around.( soft music ).

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