NFT

Overview

Tags: decentralized cryptocurrency digital tokenized assets non-fungible token: token that is digitally scarce

• allow users to make money on a secondary market that is independent from the platform creator
  • i.e. in-game items can be sold allow for creators to gain passive income from royalties of resale of original items verification via blockchain which makes it impervious to faking zora marketplace for these but they are physical. Physical assets have the scarcity that digital assets don’t have by default (can be introduced artificially) but also don’t have the freedoms of digital assets like infinitely replicable and inherently lose value
• have to introduce artificial constraints on digital assets
  • artificial rivalry to monetize content today ^Y0YM4l8eQ
  • Perhaps in fully decentralized world where digital assets are backed by NFT, the internet as we use it will have introduced artificial constraints to mimic the non-fungibility of physical assets ^4j8YdhaZe
    • i.e. dynamic interactive experience only possible via authorized access
• problems right now:
  • easy copyright infringement
    • if strictly enforced, price would become prohibitive
  • marked-based can induce unintended scarcity and price vs. value differences
    • For example on zora there’s like pants on there and since it’s market-based value the mediums are most expensive compare to other sizes since it’s presumably the most popular/applicable
    • i.e. works being free right now give a lot of value because they are widely accessible to everyone, not just people who have means to pay
      • if market priced them, it would introduce barriers act like a regressive tax on knowledge
      • this is good for cultivating more creators because of inherent value but bad for wider community because less overall access
• musings promise is that there is inherent value in creations because they are priced by users is interesting, but unsure if making everything market-based is sustainable in the long run even if it is the most “efficient”
  • i.e. it is better for consumers in a strict monetary sense when you have conglomerates like amazon/walmart because they are cheaper, even if the societal effects might be negative
• Examples
  • unisocks was coin tied to redeemable real-world socks
  • zora launched a shirt in collab with a fashion designer before the design was even released, allowed people to trade and speculate until the shirts were manufactured at which point they could be redeemed
    • the key here is you were able to speculate in advance and “believe” in creators for their sake rather than their creation, rewards early adopters heavily because price steadily increases of future coins
    • “People are able to trade culture” this doesnt seem good that you are able to speculate on culture, it maximizes utility of the value that creators extract sure but at what cost of perfectly pricing everything?
    • mechanics:
    • buy: buy one from the supply (if left)
    • sell: sell one to someone bidding on the market
    • redeem (destroys token forever)
• Thoughts
  • on art being sold via this method
    • “If the internet is the new gallery … then the only barrier is your choice whether to buy or not, not the velvet ropes of the traditional taste makers,”
• links:
  • https://www.coindesk.com/what-are-nfts
  • https://store.zora.co/introducing-zora

Tech

NFTs can be on-chain or off-chain

• on-chain: the tokenURI looks like a base64 encoded string, which when decoded becomes the JSON metadata blob
  • chain runners is an example
• off-chain: the tokenUri is a link to a place that will resolve a json blob (either centralized storage like any traditional web server or decentralized storage via something like IPFS or arweave)