Christopher B. Wright's Blog, page 11

Effectively Permanent

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A: Well, I guess that’s all there is to know about–

B: We still need to talk about smart contracts.

A: Of course we do.

B: It’s important! Smart contracts are used to manage how NFTs are bought and sold!

A: … fine. How do smart contracts do that?

B: Well, let’s say you’ve created an NFT and you want to sell it. You’d create a smart contract that outlined the terms of the...

Unprofessional But Heartfelt

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JIM WASHINGTON: Tonight in world news, this just in…

(Silence.)

(Silence.)

JIM WASHINGTON: Nevermind. I’m going home.

NEWS TICKERTAPE: (existential screaming)

Inadvertently Fungible

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A: So NFTs — at least, the kind everyone is talking about — are basically pointers in the Etherium blockchain that identify specific instances of web graphics?

B: That’s right. Storing the location of the image makes it non-fungible, since no other instance of that image can have the same address.

A: Actually it can.

B: No, it can’t.

A: It absolutely can. You could set up a ...

Stay Good, Cartoonist! Stay Good!

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A: Tell me more about these “fake” NFTs.

B: They’re not actually fake, they just don’t play by the rules they use to define themselves. Digital NFTs aren’t actually non-fungible. Because they’re digital, they can be copied and distributed with abandon. For supporting evidence I submit the entire Internet, from the moment of its creation onward.

A: So if they’re actually fungible, ...

Knockoff

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A: OK, fine – the practical example you gave for NFTs doesn’t actually represent what people mean when they talk about NFTs today, and NFTs today are on the Etherium blockchain, not Bitcoin. But what ARE they?

B: They’re a way to create artificial scarcity out of digital files.

A: Artificial what?

B: Scarcity. Artificial scarcity.

A: Aren’t NFTs “non-fungible?” Based on your...

A Brief Sidebar

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A: So if your entirely logical and fairly reasonable explanation of NFTs isn’t actually the way NFTs are being used, how are they actually being used?

B: Well first of all, the kinds of NFTs you keep hearing about these days use the Etherium blockchain, not Bitcoin.

A: Wait, what? Then why did you keep talking about Bitcoin in all your previous examples?

B: Because everyone’s h...

It Almost Makes Sense

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B: If you’re done being clueless about the cost of housing, let’s return to my example. Let’s assume I want to sell my house for 10 bitcoin. The problem is that my house is a physical object, but bitcoin transactions are digital. So I need to find a way to electronically represent my house in order to show that a transaction takes place.

A: How do you do that?

B: With metadata! I ...

Stay On Target

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B: So: NFTs! Blockchain was created to act as a ledger for cryptocurrency transactions, but we’ve already talked about how you can write more than just transaction information to it. You can add all kinds of things to it — even pictures — but it’s more common to just add metadata that points to something off the blockchain because it takes up less space.

A: Why would you want to do t...

Almost There

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A: If blockchain is so important to verifying that crypto transactions are legitimate, how can off-chain transactions even happen?

B: I already told you. You swap encryption keys.

A: That means almost nothing to me.

B: All cryptocurrency is encrypted: that’s why you call it “crypto” currency. The encryption has a public key, which everyone can see, and a private key, which only...

Because I Say So

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A: So I guess the transactions that are done by these I Swear They’re Not Banks, Really companies are all “off-chain” transactions?

B: That’s right! These Companies That Are Totally Not Banks do the bulk of their bitcoin transactions outside of the blockchain.

A: If blockchain is the final source of authority for what is a legitimate transaction, then how are off-chain transaction...