NFTs, Explained


– Now to the latest trendthat’s sweeping the internet. – So announced NFT. -[ Reporter] They’re nowselling for big horses. 69 billion dollars. – So what’s behind this latest infatuation? – That is the question to ask. – Okay, so there’s somesuper strange trash 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 really acquired for $ 2,915, 835.47. -( laughter) You serious? – And it’s not just a tweet. Simply last month a single jpegsold for 69 million dollars. The NBA is selling littlemoments of basketball games for hundreds 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 letters 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 occupation? What does this entail? – Why would you pay for an NFT when you can look at it for free? – Is this a stupendous bubblejust waiting to burst? – I believe in this spacewith my entire heart. – I’m just fascinated by it, all of it. – This story is much bigger than a $600,000 feline gif.Or a three million dollar tweet. It’s a story about human psychology and how the channel wevalue things is shifting because of technology. A engineering that some people speculate may change 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 obligating some money -[ Announcer] Oh that was insane officially senseless Lebron James. – NFT stands for non fungible sign. Okay, there it is, that’s the interpretation. Non fungible sign, procreates impression right? The video’s over now. No, one of my issues with this topic is that parties throw aroundthings like blockchain, crypto artwork, ledger, 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 enter for achance to win the Tesla and $20,000 by going toOmaze.com/ JohnnyHarris. When you gift $10 or more, your donation 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 emptied drinkable spray to the 2.2 billion people around the world who is not have safeaccess to clean-living irrigate. The non-profit employs itsdeep solar knowledge to capability and equip cleanwater, food defence, and brightnes to neighborhoods around the world. So to potentially earn a Tesla and $20,000, and to support these organizations go to Omaze.com/ JohnnyHarristo find out more.So, fungible, let’s talk about the word fungible. It’s this very specific command that economists use, it has a very precise definition. I wanna consume a different wordfor fungible for a few seconds. Let’s just use the word replaceable. Non-fungible symbolizes 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 case. “Its certainly true it is” 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 jacket expenditure $39. If you are buying one ofthese casings for $39, you don’t care what specificjacket they be transmitted to you, they’re gonna build thousandsof shells in your width, send them to accumulations, 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 jacket 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 merely desire it, I adoration the dye, I feel like an identity with this thing. And it’s sort of starting to disintegrate, but I adore it. And I kind of fell in love. This skin is not replaceable. If I went onto the website and paid $39 for a Uni Qlo orange fur that was this exact same representation, it has not been able to be this cap. This skin is non-fungible. It is the only one onthe planet that exists. It has psychological appreciate. It has relevance. 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 threw these down for a few seconds. Everything in our economyis one or the other, fungible or non-fungible.A sack or rice is fungible, you just crave a sacking 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 highway 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 unusually 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 possible. Let’s say I want to buythree wedges of pizza from my friend Anna. She charges me six dollarsfor these three slices. 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 letter is transmitted 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 report and they can give you a number. They can say based on allof these transactions, “youve had” $ 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 deals “youve had” $ 50 in your account, I can send six dollarsto Anna’s bank, approved. And they approve the transaction. Once that coin comes into Anna’s bank, Anna’s bank is doing the same thing. They’re like oh cool, “shes had” $ 80 and now she has $ 86, and they add it to her record.More and more your fund isjust a number on a screen. It’s the result of abunch of deals. You don’t barter with physical things, you don’t use cash so much better. So the bank stopping meticulous the recording of every transactionbecomes really important. We trust the bank to do this correctly. So expressed appreciation for banks. Banks and other middle-of-the-road subjects ought to have impeding stufflike this running smoothly for centuries. I convey kind of smoothly. -[ Reporter] The NASDAQ, everything and more has been completely wiped out. -[ Reporter] It was theworst daylight on Wall st.. – What in the world ishappening on Wall Street? – There have been a few bumps in the road. With the rise of the internet, parties started to wonder.Is there a path that wecould do this same thing, coordinate this same transaction of transfer of money betweentwo people without the bank? The reaction 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.Anna charges me six crypto silvers for my three slivers of pizza. I go to swipe my proverbial bank card to say yes, I want to pay you six coppers. Instead of the bank seeingthat request for a transaction and trying to validate it, it goes on to this public record where a cluster of people’s computers throughout the world are be tracked of every single transactionof everyone ever. If I don’t indeed have thesix silvers 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 inconsistency. They’ll be like whoa whoa whoa dude, you don’t have six coins. We’re looking at every event ever and you don’t have six silvers. Your transaction is rejected. If I do have six coppers, 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 silvers andnow Anna has six coppers. And they’ll write that transactioninto the public record. Now Anna having those six extra silvers is now the business of everybody, everybody now knows that. The moment here is that the group substantiates the legitimacy of every transaction by remain an nose on every transaction to make sure that it adds up. Okay I’m getting red-hot at this station, so I’m taking off my orange jacket. 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 instance wetalked about blockchain as a style to verify currency transaction. I compensate you this much, 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 knowledge a little, what if we apply this to something that isn’t fund or money? 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 coppers to Jack Dorsey in exchange for a little token, or digital certification that was of the view 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 billion dollars worth of coppers? And so a bunch of computersall around the world look at the whole entirelist of deals and say like yeah, this person has more than three million dollarsworth of coppers, 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 sign has beentransferred to somebody brand-new , non-fungible token, NFT. And if there’s anythingthat does 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 spotlit times, these Top Shot moments fromyour favorite NBA actors 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, nutrient, sanctuary, cordiality, et cetera, the next frontier is to create value in things that have no intrinsic value. The significance turns into psychological publicity. Excitement around a certain thing. We’ve been doing that forever, I convey the whole art industry is based on the idea of a bunch of beings deciding that this painting, this little bit ofcanvas and timber and paint is valuable, and thus it is valuable. The only different about now is we now have the technology to do this in a non-physical way exerting this very sophisticatedinternet engineering that is ripening very quickly.Okay, so this is a lot of publicity, and I know you’re thinking like cool, there’s a bunch of rich people online buying and trading digital art, and there’s millions ofdollars worth of cards, 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 trash 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 assortment of little plannings all day and night forever. These computers aren’t real computers, they don’t have any cache, 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 energy. And you’re like what’s aterawatt hour of electricity? That’s the same amount of influence as “the two countries ” of Serbia. A remembrance that generating electricity generally 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 world scale. – The power consumptionof the Ethereum blockchain is exploding, it quadrupledin the like eight months, and it is showing no signaling of slowing down. It is a lot of energy. And to think that that much energy is not being used tolike, move people around or induce things, it’s used to crunch numbers in a quirky computer warehouse somewhere so that somebody can buy a impostor token of a thing that this is the only way, oh humankind, I can’t, it’s psyche blowing.It’s such an paradoxical instant where it’s like this is all digital, it’s all forgery, it’s not real, but it’s having deeply real world outcomes. I just 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 imply 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 speculations and the cost goes up, and then something happens, for example. – Come on Uncle Phil, this is the’ 90 s guy. – What’s a web page, something ducks walk on? – How nice of you to join us. – On equal value, so cashin on today’s new economy. – It’s the’ 90 s, it’s hammer time. – In the’ 90 s the internet was taking off and people were just realizing that you could make money on the internet. You could realise bigbusinesses on the internet. The stock market wassurging, 400% in five years mainly fueled by so muchhype and exhilaration around these new internet companies. -[ Reporter] Break the recordas America’s longest spurt. – The new economy, is a boom without end? – This rise peaked in March of 2000, and then the bubble abound, and a good deal of thesecompanies either extended 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, firms 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 recollections to think differently about how we substantiate and confirm things. If I buy a room, there is a whole thick stack of paperworkand a bunch of middlemen to make sure that it is very clear who owns the house, and how that coin does assigned from one person to another. It is a nightmare of an experience. If abruptly technologyexisted that took apart the centralized centre “mens and” determined events between parties 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 information technologies and what it means, and eventually will adapt.This won’t be crazy, thiswon’t be fiction anymore, prices will go down, but the technology thatallowed it all to happen will probably stick around.( soft music ).

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