WTF?! ... WHAT IS AN NFT? - Pt. 1
How to explain NFTs easily, even to your grandma.
When you hear conversations about BTC, ETH, and minting NFTs, do you think, "Ummmm ... WTF?!” Then read on now!
Here's an illustration of how I would explain this crazy new world to my grandma and how you can explain it to yours:
In order to explain as simply as possible what an NFT is, I need to briefly expand a bit further, to the technology behind it, the blockchain technology.
Let's imagine the blockchain like a huge warehouse with many filing cabinets. In these filing cabinets different types of documents are stored in binders (= Blocks). On the Bitcoin blockchain, that is Bitcoin's warehouse, these file cabinets hold numbered pieces of paper on which information is recorded.
In Ethereum's warehouse, where most NFTs are currently stored, there are also numbered slips archived, but in addition, instead of just a slip, there is also the option to archive an envelope in which additional information can be stored.
THIS is an NFT.
More precisely, on the front of the envelope is noted a unique identification number, as well as information about the owner of the contents. Now let's assume that a video clip is stored here. So, inside the envelope there is a copy of the original video clip and a contract (= Smart Contract) that clarifies the copyright and contains additional requirements and/or specifications, if any.
An NFT can not only be a video, but anything that is digital: graphics, drawings, photos, animations, 3d objects, poems, posts, music, books, video games, virtual real estates, or a brain downloaded and turned into an AI, etc.
So when someone creates (= mints) an NFT, the creator puts everything in an envelope and sends it by mail to the Ethereum warehouse. When the NFT is sold, Ethereum then changes the ownership information on the front of the envelope and sends it to the buyer, but keeps a copy for archival and evidentiary purposes. We can then think of it like a land record kept in a public place, proving that you are the legal owner of a particular piece of property.
Makes sense, doesn't it?
Any questions? Send us a message!
Don't wanna miss any news? Subscribe to our newsletter! (no spam, promise)
So now let’s dive deeper Part 2 ->
Disclaimer: The rather complex topic is presented here in an extremely simplified way for better understanding and therefore does not claim to be complete.
Date: 17th September 2021
Author: Miriam Elting, Heart of MANICAINBETWEN