$69 Million for a JPEG File - The Wild World of NFT’s

this video is brought to you by morning brew hi welcome to another episode of cold fusion just when you think you have a solid understanding of the modern technological landscape it throws you a curveball seemingly overnight the term nft has managed to infiltrate every corner of the web and it's all about crypto collectibles non-fungible tokens or nfts are exploding in popularity they're being used by things like art baseball cards and even jack dorsey's first tweet powered by blockchain technology everything from digital trading cards video game items art music and tweets are being bought and sold on online trading auctions one's ownership of these items is being represented by nfts in this video we'll go over some insane things that are going on in the nft space and then move on to some sensible uses and finally finish off with what i find most exciting about the space so let's take a look you are watching cold fusion tv so what are nfts nft stands for non-fungible token the word fungible means that one item can be replaced by another item it's usually used in the context of economics for example you wouldn't care if i gave you two five dollar bills instead of one ten dollar bill all dollars are the same likewise all bitcoins are the same you also wouldn't care which exact bitcoin you receive you're just interested in its value the complete opposite of this is something that is non-fungible and this is where nfts come in they're essentially a digital certificate of authenticity that cannot be replicated nfts are stored in a blockchain and are used to represent ownership of unique items thanks to the secure nature of blockchain technology the record of ownership is always available it cannot be modified and it also ensures that there can only be one owner at a given time while there are various emerging blockchains implementing their own token system the ethereum blockchain is the most commonly used for nft creation and use although you may just be hearing about nfts now the idea of a token system running on crypto blockchains has been experimented with for almost a decade now the earliest example of crypto based tokens was coloured coins it was introduced by yona assi in 2012 and ran on the bitcoin blockchain these tokens were small denominations of bitcoin that are similar to current nfts and they were intended for use as certificates of ownership unfortunately colored coins were flawed due to the bitcoin system simply not being set up to support it and thus it was abandoned despite this the crypto community began recognizing the potential for assets stored on a blockchain in 2014 a peer-to-peer financial platform called counterparty was launched it was built on top of the bitcoin blockchain but with many improvements and it laid the foundations for modern nfts in no time at all the idea of blockchain-powered tokens began expanding into strange territories in 2016 a meme trading community arose it was called rare pepes and launched on the counterparty platform this used counterparty's tokenized asset system to facilitate the trading of pepe the frog memes thanks to this movement there was suddenly a working crypto token market for digital art by 2017 there was a major shift from bitcoin-based token platforms like counterparty to the newly successful ethereum blockchain unlike bitcoin ethereum had a system for token creation and storage built right into its blockchain it was ethereum that coined the term non-fungible token this meant that third-party platforms like counterparty were no longer necessary so ethereum took what had been attempted over the past five years perfected it and became a market leader in blockchain asset tokens more and more collectible digital assets started appearing to make use of ethereum's nfts crypto punks created by matt hall and john watkinson was digital pixel art that became quite popular ten thousand unique characters were created and offered for free to ethereum users they quickly snatched them all up and the thriving market was born and fun fact last month one of these crypto punks sold for 1.6 million dollars just a quick update while i was editing another crypto punk just sold for over 7 million dollars so why pay so much for a jpeg file at a high level you can think of it like buying a one-of-a-kind original print of a painting signed by an artist although anyone can download and copy a cryptopunk a million times no one else will have that original if you think it's a pretty weak idea for a business case i do too but we'll talk about all of this and discuss it later in the episode continuing on with our nft journey it wasn't until october of 2017 that nfts broke out from the crypto community the story of one particular digital asset became infamous it generated reactions spanning from utter confusion to outrage it was cryptokitties cryptokitties was a digital trading game launched by the vancouver-based company axiom zen it exploded with popularity cnbc claimed that it was quote epitomizing the cryptocurrency mania the trading popularity of cryptokitties was unmatched by similar nft assets look like the genes in their code define their physical appearance on 12 features based on a template by a human designer they call those features cattributes like us these cats can also carry traits in their code that only show up in their offspring and although the hype did die down over a few short months a community was established and still perseveres till today it has become clear that rare pepe crypto punks and cryptokitties were just the beginning for nfts and in the years since the digital asset industry has expanded beyond belief over the next couple of years nfts representing gifts images videos music albums and much more were eventually being sold one of the most recent success stories to gain media attention was the website nba top shot off the back of the cryptokitty success axiom zen now called dapper labs has spent the past three years working on the nba plays trading platform think of it as basketball cards but instead of owning an image of lebron james on the card you can own the video of a specific moment in a specific game this ownership has nothing to do with the licensing and in addition the video can be seen by others much like the other nfts we mentioned earlier the ownership is solely on the blockchain as strange as it all sounds people are still willing to pay big bucks they do this because they think that someone else in the future will pay even more than they did at a later date in under a year the beta version of the site has seen 200 million dollars pass through in direct sales a clip of lebron james dunking has sold for over two hundred thousand dollars the community clearly sees value here but if i'm 100 honest i don't really see it but moving away from collectibles the content creation industry has also embraced the possibilities of nfts struggling artists and musicians can leverage nfts as a powerful tool the band kings of leon surprised fans with a collection of nfts available for sale from unique artwork to images of golden ticket passes for upcoming shows the band also became the first to release an album on nft this next segment of nft news is brought to you by morning brew digital artist people whose real name is mike winkleman recently sold an nft 10 second video for 6.6 million dollars noah davis who is familiar with the sale explains that it's a sign of quote a drastic shift a demographic shift and a generational shift that needs to be capitalized on i personally think that people is very talented and a bit of a cultural icon in the digital age so maybe this one isn't as crazy as the next examples you're about to see if you want more news stories like this and love science technology and business morning brew is for you it's a news aggregator that sends you a daily wrap-up of high quality news sources it's sent to your email inbox each weekday and saturday without you having to lift a finger and best of all it's free and just takes five seconds to sign up to get started just click the link below so far we've learned that nfts are a way of claiming unique ownership over digital works but very recently things have started to get crazy we all know that high-end art being sold for exorbitant prices is nothing new but some nft stories of insane valuations are getting increasingly harder to justify a virtual plot of land in the video game decentraland recently sold for 80 000 taco bell has got in on the action and they sold a gif for twenty thousand dollars and i think the award for the most ridiculous nft goes to crypto trucks this is a drawing that my friend showed me yes this truck that you're seeing on your screen that looks like it's been drawn by a five-year-old sold for over three hundred thousand dollars kudos to the guy who managed to sell it and condolences to the person who bought it not to be outdone twitter ceo jack dorsey has put his first ever tweet on auction the current highest bid 2.5 million dollars and again you can go to twitter and look at this tweet yourself for free to me it looks a bit like 1999. at the time stocks were at an all-time high beanie baby prices were skyrocketing and people wanted to get rich quick there's echoes of all of that today but this time there's a lot more money in the system from house prices to high-end cars and art asset prices are booming and it's kind of starting to look like a bubble getting ready to burst i could be wrong though collector communities can endure in a secondary market long after the initial hype has faded so this is how i think things will go the nft bubble will grow bigger and then pop after this nfts will get a bad reputation when all the hype fades but then after this the real world uses will start arising just like google and amazon rose from the ashes of the dot-com bust when many others didn't survive nfts will start having wide appeal in applications that have real world utility here are a few examples of what i expect to be more sustainable uses for nfts purchasing domain names collateral in decentralized crypto loans the registration of a car or a deed to a home these are all uses that the average person can understand and take part in but the most exciting use of nfts for me is the concept of membership for example i could release a cold fusion nft that grants you the viewer voting rights and what videos come next and other perks such as merge and future releases of music from me the cold fusion token would also double as an investment in the channel almost like shares in a company here's what i mean say if i only make 100 of these tokens if the channel grows and is perceived to be more valuable you the viewer could sell this token to someone else for a profit this concept logically makes sense to me it gives buyers of the cold fusion nft immediate value but also a way of profiting if they hold on to it and resell it buying something like a crypto truck makes less sense to me with the news stories focusing on the outrageous side of this technology it's easy to see nfts as a hyped craze waiting to die out but as i just described i think there's actually more to it nfts are already primed for widespread applications in both outrageous and mundane ways while we may be distracted by nba players and crypto trucks nfts may quietly become a part of all of our lives without us ever noticing in the next episode we'll take an interesting look at the origins of bitcoin from the 1980s onwards and then later we'll take a look at how far it's come and explore who bitcoin's creator might be is part one of a two-part series so make sure you're subscribed so you can catch it so thanks for watching my name is tagogo and you've been watching cold fusion and i'll catch you again soon for the next episode cheers guys have a good one cold fusion it's new thinking

Channel: ColdFusion

Views: 643,193

Keywords: Coldfusion, TV, Dagogo, Altraide, Technology, Apple, Google, Samsung, Facebook, Tesla

Id: x3nmAX3gAlw

Length: 13min 17sec (797 seconds)

Published: Fri Mar 12 2021

Reddit Comments

[u/Balor675]

People are fucking idiots...

[u/inanimatus_conjurus]

Buying Jack Dorsey's first tweet makes sense if you could edit it to say whatever you want.

[u/the320x200]

It's weird to see people interested in "ownership" disconnected from any actual value. Most of these NFTs aren't tied to the possession of any physical object or actionable rights. Literally just speculation and fabricated bragging rights.

I expect a lot of the buyers don't understand that they haven't actually bought anything besides the token.

[u/ZakTH]

I’m glad to finally see a video explaining it. I’ve seen a lot of outrage on my twitter timeline from artists who’ve had their work stolen and sold as NFTs and who are also concerned about the environmental impact of so much crypto mining.

[u/Factory_Supervisor]

Illusory exclusivity for a social elite circlejerk.

[u/Shenaniganz08]

1) If there was any sign that we are in a bubble this is probably the best

2) This is clearly an easy route for money laundering

3) You don't "own" anything. Those NBA clips belong to the NBA, those digital art can be copied and distributed for free.

The biggest issue with NFTs is that they are unlimited.

[u/rac_cool69]

Let's see who you are under the mask NFT

what... Money laundering you were NFT all along

[u/timelighter]

Own this ~U N I Q U E~ /u/timelighter comment right here! Leave your bid below: