What does NFT stand for?

247 Views

title: NFT basics

date: 2022-02-19 23:15:36 tags:

Supplement: Tokens can be translated into either tokens or tokens

NFT is

Non-homogeneous tokens

(non-fungible token), as if said and not said. This article will give the abstract meaning of NFT, but also give some NFT

The Application

And specific examples of use cases.

First, let’s analyze the name. Before we talk about “non-homogeneity,” what do we mean by “tokens”? For us, a token is an information system called

Block chain

A kind of record. We won’t go into the details of how blockchain works here. To understand what NFT is, we just need to add some background.

A little bit of history

The most famous is blockchain, which coined the term. The white paper of Bitcoin introduces the concept of “blockchain”. During the formation of bitcoin, block is a storage unit that records all the communication information of each block node within a certain period of time. A random hash (A.K.A

Hash algorithm

), the latter block contains the hash value of the previous block, with the expansion of information exchange, one block and one block successively, the formation of the result is called block chain. The Bitcoin network has a Token called “bitcoin.”

Like traditional cash, bitcoins are fungible, meaning that you can replace one bitcoin with another without changing the value of any of them. In fact, technically, there is no such thing as a “single bitcoin” that has its own identity. (This can be a mouthful, since by definition NFT is non-fungible.) While cash may at least have a serial number to distinguish one bill from another, the Bitcoin network doesn’t track each bitcoin individually and assign them an identifier. Instead, the system just keeps track of the amount in each account, with each transaction

credit

One account and debited the other.

Bitcoin has inspired many other blockchains that iterate on the same basic ideas and introduce new features. The most significant of these iterations is Ethereum’s development of the concept of NFT. Ethereum has added general-purpose computation to the blockchain consensus model pioneered by Bitcoin, positioning itself as a “world computer” and achieving”

Programmable currency

“(“programmable money”)

Ethereum has a native token called Ether, which is used both as a store of value and to pay for computing in the form of a fee called gas. Like Bitcoin, ether is fungible. But,

Smart contract

The computing model allows developers to create their own tokens, which can have special properties based on the logic in the contract.

Most early smart contracts defined homogeneous tokens similar to Ether, but people soon began experimenting with using tokens to contain data (hashes), making each token unique and distinguishable from others. As a result, there is no simple exchange with another arbitrary token of the same type or with a non-homogeneous token.

What makes a token irreplaceable (non-homogeneous)?

Earlier, we mentioned that serial numbers are a way to distinguish a dollar bill from another bill. Even if you could tell them apart, two dollar bills would still be interchangeable because they each have the same value as money. A unique identifier alone is not enough to make something irreplaceable.

However, Picasso painted it

Dollar bill

It’s unique. It has nothing to do with the serial number. By using it as a medium for art, our imaginary Picasso makes bills less fungible. Although technically you could trade it for a dollar’s worth of snacks, bills are now exchanged for much more than a dollar.

Similarly, by allowing each token to contain a small amount of arbitrary data, the NFT becomes a medium for creative expression, as well as a unit of exchange and account. Therefore, the value of an NFT is highly dependent on the meaning it contains and represents. The same NFT may be treated quite differently by different people, depending on factors such as aesthetic taste or the identity of the creator.

Of course, there are good reasons why we don’t do business by exchanging priceless Picasso sketches! Without homogeneity, NFT is inferior to money (not as readily available in the market as money). However, by existing on the same networks that support the digital currency, the NFT can leverage the payment and account infrastructure to complete transactions and benefit from the security guarantees of the blockchain.

What is special about NFT?

What makes an NFT different from an animated GIF file on someone’s website or some other type of digital record, such as a spreadsheet?

These differences depend on some core attributes of blockchain design. The main function of a blockchain network is to allow all participants to agree on a shared “state of the world”. For Bitcoin, the shared state is the balance of each account, while for Ethereum, the shared state is the input and output of the smart contract interaction. Because network members are spread around the world, it takes time for everyone to converge on the same state, and there are special rules to prevent cheating or malicious behavior. Once everyone agrees on the state, it becomes part of the history of the blockchain specification.

As new blocks are added to the chain, earlier blocks become harder and more expensive to modify. Soon — the “change history “between blocks will be too large to change, so the information recorded in the blockchain can be considered permanent.

By contrast, traditional networks are notoriously fickle and dynamic. For example, a Web server might serve different content based on the time of day or the geographic location of a visitor’s IP address. As with dead links (404), content disappears from the web as often as it is produced.

This nature of persistence and stability is at the heart of the NFT value proposition. By using the blockchain as a persistent shared data storage medium, the NFT can be trusted to persist as long as the blockchain itself remains operational — which brings up another interesting feature of the blockchain. By rewarding node operators with cryptocurrencies in exchange for keeping the network alive, blockchain incentivizes its own survival. As long as there are people attracted by the financial rewards, there will be people motivated to keep the Web online. This ensures the survival of all historical data, including the NFT.

As we’ll see when we discuss content persistence, blockchain isn’t always enough to keep your NFT alive forever. NFT is often linked to data outside the blockchain, which also needs to be kept online.

What is the use of NFT?

One of the earliest NFT experiments was CryptoPunks (

Crypto punk

), a set of 10,000 pixel art characters that can be collected and traded on Ethereum. While anyone can view any punk’s artwork, each character can only have one official “owner” on the Ethereum blockchain at any given time. CryptoPunks proved to be a huge success for the rare punk trading hands, with huge amounts of ether worth millions of dollars.

Digital collectibles like CryptoPunks remain one of NFT’s most popular and high-profile use cases, and the successor to CryptoPunks has helped define NFT interoperability and

Metadata

The earliest standard of the

In the years since CryptoPunks debuted, NFT has become a tool for creative projects of all kinds. Much of the excitement comes from artists who want to interact directly with fans and find new ways to make a living from their work. This results in a growing NFT

Market ecosystem

These ecosystems bridge the gap between the familiar web and the arcane world of cryptocurrencies, and also result in millions of dollars worth of direct payments to artists for their digital creations.

Beyond digital art and collectibles, NFT has found use cases in games that they can represent

Virtual land

Plot, avatars and skins of game characters, in-game items, etc. By putting players’ “inventory” of these items on a shared blockchain, NFT-powered games can enable new mechanics and allow players to use their custom items across multiple potential games and experiences. They also provide a way for players to buy, sell, and trade items among themselves without having to lock purchases into a single company’s storefront or marketplace.

A supplementary introduction to Cryptopunks

10,000 unique collectible characters with proof of ownership stored on the Ethereum blockchain. The project that inspired the modern CryptoArt movement.

Cryptopunks are one of the earliest examples of “NTF irreplaceable tokens” on Ethereum, and the inspiration for the ERC-721 standard that underpins most digital art and collectibles.

CryptoPunks are 10,000 unique generated characters. No two are exactly the same, and each can be officially owned by a person on the Ethereum blockchain. Initially, any possession

Ethereum Wallet

All of them were free, but soon all 10,000 were. Right now, they have to be bought from someone through a marketplace embedded in the blockchain. Through this marketplace, you can buy, bid on and sell punks. Punk with blue background is not for sale, there are currently no bids. Punk with a red background is available for sale by its owners. Finally, punks with purple backgrounds have a positive bid for them.

What are CryptoPunks? CryptoPunks are 24×24 pixel art images, generated algorithmically. Most are awkward looking boys and girls, but there are some rarer types: apes, zombies, even weird aliens. Each punk has their own profile page showing their attributes as well as their ownership/sale status.

Looking ahead

We’re still in the early stages of NFT, and we’re likely to see a range of interesting NFT use cases and experiences that go beyond our current perception of what we’re doing. It’s hard to predict what the future will bring, but if you keep learning, you have a better chance than most. As they say, the best way to predict the future is to create it yourself!