(Part 1) Everyone is talking about NFTs (non-fungible tokens), and there are few lukewarm opinions out there. Some think NFTs are scams, or part of some large Ponzi scheme. Others are doubling down, convinced that the revolution is here to stay.
What the heck are NFT's, and why should you care? Let's talk about it.
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Today on Wisconsin veterans forward. What the heck are NFTs? Everybody's talking about NFTs. There are no lukewarm opinions about NFTs. Either. You think that they are the future of everything, or you think that they are a pyramid scheme, Ponzi scheme ? I don't know . I've heard it all. Some sort of scam. The , the , the , the , the web three version of beanie babies that is having its moment in the sun and then will disappear. But there's not a lot of in between. There's not, you know, if you know something about NFTs, you have a strong opinion one way or the other. So today we're going to investigate. First of all, you don't know what it is. We're gonna talk about what is an NFT, a non fundable token, what are they, what do they represent? What can they do? What can't they do and what role they have or could have, or are they a scam? Are there drawbacks? Are there limitations? This is something we could talk about for a long, long time. And I know a lot of you are super interested in this topic, cuz it's very timely. It's very, apropo everybody. If you have NFTs, if you have a bag of NFTs, I want you to tell me in your comments, tell me what you're holding. I may have a couple myself. All right , we're gonna dive right in. We're gonna dive right in. Right after this, you are listening to Wisconsin veterans forward. Wisconsin's premier audio resource for veterans, military families, veteran owned and veteran friendly businesses. Wisconsin veterans forward is brought to you by the Wisconsin veterans chamber of email@example.com . Really excited to introduce Manny Lara , who is a local entrepreneur and NFT and cryptocurrency , uh, aficionado and enthusiast. Uh , just so you know, there really is no such thing as an NFT expert, cause it's like brand new, like the seasoned veterans in this space have been doing it for one year. Those are your grizzled longstanding. Like most of the anybody who's done it longer than that is like ancient and this space moves so, so fast. You know , one day in the NFT world is like a year. Uh, so the folks who have a few months of experience, I mean, they're in , in high demand for their knowledge who man , he's been doing this for, for, we can call, 'em a veteran who call a veteran of the NFTs and he's an entre entrepreneur. Uh, anyways, I'm gonna stop talking. Manny, how are you my friend.Speaker 2:
Hey, thanks Adam. Um , I'm great. Thanks to, for having me on , uh, and I think you captured it correctly that, you know, we're, we're still , um, learning who the experts are in this space. Uh , I think, you know, some of us who quickly , uh , read up and research , um , become, you know , uh , learn something new every, every time you read something. So I think it's , uh , still really early and anyone can get into it right now. Um, and , uh, yeah, it's exciting. SoSpeaker 1:
Now , now you can't really understand what NFTs are without at least a cursory understanding of what blockchain technology is and what cryptocurrencies are. And I know that's something that you're, you're very familiar with. Can you give us a crash course? What is a blockchain? Yeah. How does that lead to cryptocurrency and how does that lead to non fungible tokens?Speaker 2:
Yeah, I , I would , um, I'll give you like my understanding of it. I know there are a lot of techies that are much more, they get really into the weeds of it, but essentially , um, you know, the blockchain is a technology , um , that was developed, you know, in concert with like Bitcoin and cryptocurrency , uh, you know, gen you know, an anonymous source name , Sato Naura like published a white paper. And this is following the, you know, the , um, the financial crisis of the housing bubble that crashed mm-hmm <affirmative> there was this, you know , uh , a commentary on like is Fiat currency, something that's stable. And so this grouping of, of anonymous, and this could be more than one person, but they established this , um, this digital currency called Bitcoin that , um, was working on this new tech off of this work new technology that essentially is , um, hackable is , uh , super secure , uh , complex , uh, and minors , where they call miners , who basically solve these computational problems , um, earn Bitcoin for their work. And that was how it , it became, it came into place, I believe around 2000, 2008, 2009, somewhere around then. And , um, it, it took a while to kind of, you know, evolve, but you know, now crypto's up to 40,000 , uh, give or take a thousand or coinSpeaker 1:
Is yeah .Speaker 2:
Uh , per, per coin. And, you know, Ethereum is the , the carve off of that. It's a , it's also blockchain base , but it's more around proof of work, proof of steak , they call it too. So yeah.Speaker 1:
Moving towards proof of steak . Yeah,Speaker 2:
Yeah. Right, exactly. So they're moving towards the proof of stake . They're still proof of work, but they're also , um , what our NF , the NFTs are backed off of mostly Ethereum , uh ,Speaker 1:
Blockchain. Uh , yeah . A lot of them are. Yeah. Yeah . So , you know, I think a fundamental , um , place of understanding for blockchain , uh , for those of you that are familiar with a ledger, this is a distributed digital ledger. So once something happens once a transaction takes place on the blockchain, then it is verified on the chain by other nodes. And it's creating this huge document of all of the transactions that happen in, in, in a timeline, right. And each one of those transactions are verified by the other nodes to include all the ones before it . So if you wanted to, to falsify something on the blockchain, it would be really, really hard to do. You mentioned it was secure because you'd have to change it and then you'd have to change it for all the nodes. And then all the things that happened before it, it is almost , it's not impossible, but it is almost impossible to , to fake or to hack. That doesn't mean that there aren't scams out there, cuz there are a billion of them . Uh , but when , when it comes to the really complex stuff , uh , you can't change something on the , on the blockchain. You can trick somebody into giving you something that they don't, that they don't wanna give you, but you can't, you , you can't really alter it. Yeah . And, and, and you also hit the nail on the head with, with cryptocurrencies is that these transactions that are, that are happening on the ledger are being , uh, computed and calculated by these minors and they're being compensated for their work. Right . So , so Bitcoin originally was like a self licking ice cream cone. Mm-hmm <affirmative> these Bitcoin transactions were happening. People were calculating the , those transactions and getting compensated in Bitcoin for the, for the Bitcoin, for the blockchain transactions. Uh , but then it just grew from there and now it's this huge Altra so, so what does that have to do with the non fungible token then? So, so bring us from, from cryptocurrencies. And that is like the most blasting through the thing rundown of blockchain and crypto, but how does that lead to non fungible tokens?Speaker 2:
Yeah . So the non fungible tokens they're, they're based on a blockchain based technology. So think of it, it's just another way of, of , um, publishing or authenticating , uh , something of value. So right now the big thing in NFTs are artwork , uh , digital artwork primarily. Uh, and you'll see, you know, some of those, like the board API club NFTs that some of the celebrities are owning, you know, for, for thousands and even millions of dollars. Um, what that means is that they purchase that using blockchain technology so that they can be identified as the owner of that , um, that digital art and nobody can, ISpeaker 1:
Mean , I wanna do that. Why , why don't I just right . Click and say that , and then it's mine andSpeaker 2:
Sure. And, and I think, you know, that's a lot of people's questions, but what it does, I mean, and what they're learning quickly is it there's some degree of , um, uniqueness value privilege, even. So you can write those into those , um, the NFT contracts that if I own this, you know, this , uh, this digital arts, I have maybe access to special parties or , uh , V I P events. Um, and also if it, if it , um, generates value, you can sell that , uh , back to on the market and, you know, they would have to verify that, that you own that, that digital art and some of that has, you know, exponentially increase in value over the last few, couple years, evenSpeaker 1:
So. Oh, absolutely. And so it's not just the right click save as action. It's , you know, it's not just having a picture of it on your computer or your phone or whatever it is. The there is metadata that is attached to that . I mean, that JPEG is just a representation, right . Of a smart contract of, of this, this sometimes very deep and complex metadata that represents something further. So what you're doing is you're proving ownership of this art, but really what you're getting is a membership card. Right. You know, if I have a membership card to an exclusive country club that I pay a thousand dollars for, that lets me into that place and gives me perks and discounts and freebies and gift baskets, and you name it. If I were to take , if somebody were to take a picture of that card and bring it in that wouldn't give them access to the country club, they would need their ownership verified. So that's the difference. This is an actual membership card, right? And, and, and those, those kind of perks that you get, you know, either whether it's the community and the belonging or actual, tangible, like they ship you things, or you get, I, I own an NFT that pays me real estate dividends every month from their real , from that project's real estate , uh, endeavors. I mean, there's a million ways that that utility can exist. Yeah. Um, and there's varying degrees. Some utility is ridiculous. Some there's no utility whatsoever. Yeah . Uh, what do you see as, as the future here? Because right now people, people are seeing, all right , I buy an NFT and it , I verify my ownership. It gives me exclusive access to a discord channel that I don't care about. I don't care about the art. I don't care about any of this. Mm-hmm <affirmative> why, why should I understand this? There are , there are some future applications for this though . Yeah,Speaker 2:
Absolutely. And I , and I think, you know, we're just really scratching the surface on this and there's, and , um, you know, the novelty is some of these, these fam these kind of more known digital arts , but , uh, I would start with the artist community and, you know, even going, venturing into things like music , uh, where you are creating , uh , intellectual property and you wanna protect that. And so you can do that through an NFT , uh , creation or collection of NFTs that you, as the author , um, have ownership of. And you can sell those on like an op , uh , marketplace, like an open sea where not only can you as an artist earn, earn , um, revenue from, but if somebody turns around and sells that you can earn secondary and tertiary revenue mm-hmm <affirmative> . So you can even continue to earn , uh, on the sale of that from, from another buyer. And so that, that helps , um , artists create more sustainable , um, careers in their particular field feel comfortable about their, their work product and that nobody's like stamping or stealing it because it has to be authenticated. And so that's the, one of the advantages from that creative side. Um, I would say, you know, it's starting to get into the real estate side as well, becauseSpeaker 1:
Yeah. Tell me about that.Speaker 2:
Yeah. So I own a couple of , uh , digital , um, real estate plots. And what that is is essentially, you know, a , you know, there are a few companies that are mapping out real estate around the world. You know, it's a 100 meter by 100 meter grid, but you purchase that through an NFT and you basically can authenticate that you own that digital property. Meaning like if I wanted to put a , an AR image, an augmented reality image in that property, I can do. So, you know, you think about like billboards in a digital space, you know, out in the, in the public. So you can essentially advertise, you can market, you can recruit using this digital , um , this new digital , uh , landscape. AndSpeaker 1:
Now you're talking about digital real estate. Like, metaverse you , like, not in actual, it doesn't represent a physical plot of land on the earth.Speaker 2:
Um, actually it's both , or it can , it , it can. And actually, yeah, there's a couple companies that are, that are plotting on the actual, the , the , the world itself. And , and they're , they're mapping those out and you essentially own, you know, one plot per 0.1 NFT or E you know , they , they , um , uh , they're, they're using E Ethereum or Solan , some of those other , uh , maybe , um , different types of, of technology to validate that purchase. And so now, I mean, I own a couple of plots in this area and they're , you know , they're selling quickly they're and they are affordable, and that's the thing it gives accessibility. I don't have to spend, you know, on , you know, for , uh , thousands of dollars on this , uh, maybe a couple hundred, and now I have digital rights over that. And it it's, it's, we're coming into a little bit of a quandary with that because you can't see it, right. Unless you have augmented reality or you go into the virtual world. So like, who truly has the ownership rights of that. Right. So, right right. Now these companies are, are scaling fast and they're starting to take hold of that. And they themselves are generating revenue from, from mapping those that , those, those plots out. But I do see down the road, you know, as things like, you know, you think about, you know, Pokemon go, people are still doing that, you know , around some of these areas and think of doing that. But with , um, something that's more ubiquitous like sunglasses, or even regular glasses, like there are there's technology, you know, Google has already proven that with their Google glass , um, their Google eyewear , but Ray bands getting into that business , um, apples getting into that business, Facebook, it's going to be something much more , um, accessible for communities. And mm-hmm , <affirmative> the businesses that will realize that will say, Hey, I should buy my property, my physical property in that digital space so that I can own that. Not only from a physical ownership, but from a digital ownership , um , perspective asSpeaker 1:
Well. Good stuff. We're gonna continue this part, two of this discussion with our friend, Manny Lara , uh, that episode's already sitting there waiting for you . So we'll see you over there. Thank you for listening to Wisconsin veterans forward, brought to you by the Wisconsin veterans chamber of commerce. Please visit firstname.lastname@example.org . Don't forget to subscribe to this podcast, leave a rating and review in whatever platform you're listening through.