Explain this to me like I am five years old (NFT)

Status
Not open for further replies.
F

Fermion

Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Joined
Sep 12, 2012
Messages
6,023
Location
Seattle
I've read several articles on NFTs including a very good one in the most recent issue of Kiplinger's and I still have absolutely no idea what an NFT is. The articles all talk in circles and I have yet to find a single one that actually explains what an NFT is.


Here's the Kiplinger's article. If anyone can read it and then explain to me in clear terms what an NFT is let me know: https://www.kiplinger.com/investing/cryptocurrency/604420/why-everyone-is-talking-about-nfts



The best I can come up with is that you're buying a computer graphic of sorts. What I don't understand is why that has any value. Why is an icon designed by some famous artist worth hundreds of thousands of dollars. You can't frame it and hang it on your wall like a Picasso. It's a digital image. And being a digital image, what prevents anyone from copying it? I can copy almost any image I find online. There are even ways to remove watermarks (not that I'm proposing anyone do that).


So I don't get it either.
 
It’s a one off digital image. Like owning an original painting, only it’s digital.
 
COcheesehead said:
It’s a one off digital image. Like owning an original painting, only it’s digital.
Click to expand...
That was my understanding, limited as it is. But what's the point? So I have an emoji that nobody else has. What can I do with it? And what stops anyone else from reproducing it? I'm still not understanding why that would have any significant value.


An original painting is a physical thing. Someone can try to duplicate it but it would never be exactly the same as the original. But digital images can be copied exactly.
 
disneysteve said:
That was my understanding, limited as it is. But what's the point? So I have an emoji that nobody else has. What can I do with it? And what stops anyone else from reproducing it? I'm still not understanding why that would have any significant value.


An original painting is a physical thing. Someone can try to duplicate it but it would never be exactly the same as the original. But digital images can be copied exactly.
Click to expand...

it only has value because other stupid cool ape avatar people with too much money say it does. NFTs are the worst
 
disneysteve said:
That was my understanding, limited as it is. But what's the point? So I have an emoji that nobody else has. What can I do with it? And what stops anyone else from reproducing it? I'm still not understanding why that would have any significant value.


An original painting is a physical thing. Someone can try to duplicate it but it would never be exactly the same as the original. But digital images can be copied exactly.
Click to expand...

You own the file and have the right to protect it from unauthorized use. My wife is a photographer and has won a couple small claims court actions on her photos. Same thing.
 
There are/were loads of companies which sold naming rights to stars. For a fee, they give you the coordinates of the star, and the star's actual name as described by the International Astronomical Union -- which is the only body which is accepted by astronomers. And then in big letters, "Molly's Star" or whatever the person paid for.

Same thing.
 
They are a stupid bad investment (IMHO).
The value is totally based on someone being stupider to pay more than the original purchaser.

Here is an example of one that sold for $2.9 Million, and now is going for $278.
"NFT of Twitter founder Jack Dorsey's first tweet sold for $2.9M last year, highest bid on resell just $278"
https://yourstory.com/the-decrypting-story/nft-jack-dorsey-first-tweet-29-million-last-year-highest-bid-resell-278/amp

I have saved this post before posting it, and am willing to sell the original pre-posting I saved for a mere $1.1 Million, just PM me. :angel:
 
The owner is eyeing a sale to Elon Musk (the hook was, “how can you own all of Twitter and not own Jack Dorsey’s first ever tweet?”) Musk tweeted that he has made an offer. So, stay tuned.
 
COcheesehead said:
You own the file and have the right to protect it from unauthorized use. My wife is a photographer and has won a couple small claims court actions on her photos. Same thing.
Click to expand...
Ok. So your wife can sell prints of her images. She can sell the use of her images to others like someone who wants to use it in an advertisement. Or she can sell the rights all together and no longer own that image. I understand all of that. But would anyone pay her millions of dollars for one of her images? I’m guessing not.

While I see the similarities between one of her photo files and an NFT, I still don’t get why one is worth maybe a few hundred dollars and the other is worth millions.
 
The creator of the original work holds copyright to the work, but allows the digital use for the purchaser of the NFT. If I post an NFT of this post, someone may buy it, and hope to resell it for a profit. Jack Dorsey's IP is a better bet, but not a sure thing, of course.
 
One late-night comedian recently described NFT's as "virtual Beanie Babies."

I'm not sure you even own the copyright to an NFT.

As far as I can tell, they're a virtual "badge" that proves you paid to have your name associated with something. The private star name registry example is probably the best analogy.
 
NFT sale!

I'm going to sell NFT's of the Olympic Pins I collected during the Los Angeles Olympics in 1984. They are rare and I am offering a digital NFT of each one.

The price is $1,000,000 each. Email me if you are interested in buying one or more. When they are all sold, I will not be making any more NFT's of my 1984 Olympic pins.

Also, I will not accept Bitcoin or Ethurm for payment, or payment using any other of the 11,000+ "coins" in circulation. Payment is desired by wire transfer in U.S. dollars to my bank account in Switzerland.

Upon funds clearance, you will receive your NFT in digital format to your email address.

Thanks for your interest.:)
 
It is another version of the "Greater fool theory"

https://www.investopedia.com/terms/g/greaterfooltheory.asp

The greater fool theory argues that prices go up because people are able to sell overpriced securities to a "greater fool," whether or not they are overvalued. That is, of course, until there are no greater fools left.
Click to expand...

Edited to add:

Also PT Barnum was way ahead of his time and saw this coming
 
Last edited:
I read the best (and perhaps) funniest description of what an NFT really is yesterday:

You are married and have the license to prove it. However, anyone who wants to gets to screw your spouse. Your marriage license is the NFT. Your spouse is the jpeg it points to. :LOL:
 
COcheesehead said:
It’s a one off digital image. Like owning an original painting, only it’s digital.
Click to expand...

disneysteve said:
That was my understanding, limited as it is. But what's the point? So I have an emoji that nobody else has. What can I do with it? And what stops anyone else from reproducing it? I'm still not understanding why that would have any significant value.

An original painting is a physical thing. Someone can try to duplicate it but it would never be exactly the same as the original. But digital images can be copied exactly.
Click to expand...

This is what confuses me about NFTs. If I bought the NFT of Jack Dorsey's very first tweet, what exactly would I own? The tweet itself was a series of digital bits that originated on his computer (or phone) and ultimately ended up on Twitter's servers. How can one "own" a series of bits, representing a short text message, that reside on a magnetic platter inside a hard disk on a server somewhere? The concept of ownership here is very unusual and novel, IMHO. But I suppose one could ask the same thing about my ownership of, say, 100 shares of an ETF. They also exist solely as electronic data residing on a computer/network. The difference, though, is that there is a lawfully agreed upon and enforceable value of the ownership of those bits vs. no such agreed upon value of the tweet bits.
 
Sojourner said:
This is what confuses me about NFTs. If I bought the NFT of Jack Dorsey's very first tweet, what exactly would I own?
Click to expand...
Same question here.


Anyone with a computer can go to Jack Dorsey's twitter feed and view his first tweet. What would owning an NFT of that tweet actually consist of?


Nobody seems to be able to answer that question.
 
aja8888 said:
I'm going to sell NFT's of the Olympic Pins I collected during the Los Angeles Olympics in 1984. They are rare and I am offering a digital NFT of each one.
Click to expand...
I realize you're joking, but what if you were serious? Does that mean you would take a digital photograph of each pin and sell that file, the same way a photographer sells one of their images? If so, what is the difference between an NFT and a photograph?
 
disneysteve said:
Anyone with a computer can go to Jack Dorsey's twitter feed and view his first tweet. What would owning an NFT of that tweet actually consist of?
Click to expand...

My best guess is that it would be similar to "owning", say, the MS Word document of Bill Gate's autobiography. You wouldn't own the hard drive where the bits were originally created and stored, but you'd own the unique pattern of bits exactly as they were originally stored on his hard drive. As you said, however, that specific pattern of bits can be perfectly copied and transmitted in an unlimited fashion, so ownership is a strange concept. IMHO, my "ownership" of the digital representation of, say, a Botticelli painting wouldn't have a clear value, whereas my ownership of the original, physical painting on canvas would have widely recognized value. What does it actually mean to own something that can be effortlessly (and perfectly) copied and accessed by anyone at any time?
 
Explain it to you like you are five?

“Get your hands off that! Leave it alone and go outside!”

There ya go. :)
 
You need to separate the tech from the price.

What is Art?
Why is it worth millions?

Two separate discussions.

What is an NFT?
A digital contract attached to an artwork (or other item). This contract can be written any way you want and include whatever you want. Once written and created the digital ‘token’ that contains the contract can be traded like a stock.

Why would it be worth millions?
Purely for art/investment/marketing reasons. Nothing to do with it being an NFT.
 
Reminds me of the proliferation of derivatives and mortgage-backed securities leading up to the 2008 financial meltdown, in that many smart people couldn't really explain how they worked (or so I've read).
 
Status
Not open for further replies.

Latest posts

Back
Top Bottom