Blockchain Technology: Future of Non Fungible token in India
Created on 07 Jan 2022
Wraps up in 5 Min
Read by 2k people
Updated on 19 May 2022
An artist sold his piece of art, a sculpture for $18,300 - ₹13,61,337; the only problem being - the sculpture was invisible!
It is difficult to understand something we cannot see or touch.
It is even more difficult to understand something that has no existence.
But lately, I have learnt, that it is not the existence of a material that makes us understand/believe in it. It is the faith of the masses in the material that makes us believe it.
What if a person wakes up one day and decides this paper currency that I use has absolutely no value and there is no point using it. He convinces 10 other people the same, and the chain keeps on growing. A huge mass of people relegates the currency of the country because they have lost faith in it. What happens then?
What exactly is NFT?
Salvatore Garau is an Italian artist who calls this invisible sculpture as Lo Sono, meaning ‘I am”. The bidding started at $8,000. And it reached $18,300 and 1, 2, 3 - sold! - To an anonymous man there!
When asked to explain the ‘art’, he exclaimed - “The vacuum is nothing more than a space full of energy, and even if we empty it and there is nothing left, according to the Heisenberg uncertainty principle, that ‘nothing’ has a weight. Therefore, it has an energy that is condensed and transformed into particles, that is, into us.”
This sales pitch certainly would not be enough, at least for me, to put lakhs of my money into literally NOTHING!
But what is more important is, how would the person, who bought this ‘sculpture’ know he has a possession of it?
Here come NFTs. This Italian artist provided the buyer with an ownership certificate- an NFT.
You must have heard a lot about NFTs by now, but still might sometimes wonder what it actually means and what are those things? Let us break down its meaning word-by-word.
Non-Fungible Tokens or what we like to call- the NFTs are just like receipts you get after a purchase. But there are layers to it. Fungible means replaceable or interchangeable. Thus, Non-Fungible means something which cannot be replaced or interchanged with any other thing.
Token could be anything- a piece of paper, metal, plastic, or anything intangible that is used instead of money for a transaction. But in case of NFTs, tokens are based on the blockchain technology (a whole other concept explained below) that makes this unique.
Let’s look at it this way- Suppose you buy the famous - ‘The Starry Night’ by Gogh, SUPPOSE. You have the oil painting in your possession. But, there are literally millions of copies of the same painting. What distinguishes yours from the rest? Nothing much, except for the texture of the painting which is not evident to a netizen if he or she is not an art enthusiast.
Now, if you had an NFT of the same, you could prove it to the world that you are the rightful owner. Sounds simple, no? It actually is, and that is the reason why the world is moving towards it.
The artist giving an NFT of his ‘art’ to the buyer means, it is only the buyer, and buyer alone who is the rightful owner of the art.
So, NFTs are nothing but a digit record and proof of any art, music, video and even memes, that is transferred from the seller to the buyer to prove the ownership.
Now, how do NFTs work? How do they ensure legitimacy? How are the records kept and how are they accessed?
Let us dive deeper.
Blockchain By Definition
NFTs function on the concept of blockchain and without this, the existence of the price of art could be very, very questionable.
A blockchain is a series of linked blocks that contains information of the current transaction and the ones before that which have ever been done across several computers in a decentralized manner. These transactions cannot be altered. It keeps the identity of the owner anonymous. People from any corner of the world with internet access can use and trade using blockchain.
Let’s look into it like this. Your teacher handed you your scorecard today and boy, you failed in three subjects. Now, you cannot show this to your parents, or else you are surely getting kicked out of the house. To save yourself from the engulfing rage of your father, you edit the document and hand over another scorecard in which you pass by flying colors. 4 of your other friends did the same and no one ever finds out.
Except maybe, when your parents meet your teacher in a supermarket and have a striking conversation about your academics. No possible damage control could get you out of this.
Enter blockchain. Suppose, instead of handing the scorecard personally over to every student, your teacher uploaded it to the blockchain to which you as well as all the students and all the parents of students of the whole school have access.
Each with a unique id can access their own scorecard. Now, suppose you try your old trick and segue from the original scorecard to a new shimmery one. Only this time, it will show that the current block has been altered and all the blocks following it will show the same. So anyone could very easily find out the origin and your little trick will fail.
This, however, might sound disadvantageous with the analogy of scorecards for a student, but is actually a very effective and efficient way of sending, receiving, or storing data with timestamps that cannot be tampered with.
Let’s get technical
There are essentially three parts of a block in a blockchain- the data, its hash, and the hash of the previous block. First, Data- contains the ‘To: , From: , and Amount:’ information of the current block. Then, Hash is the unique id mentioned in the above example, which is a fingerprint. Finally, each of these blocks stores the hash of the block before it. Anyone can view and verify using the Public Ledger.
Now you might think that if everyone has access to the complete blockchain, what about your privacy? Every information ever added to a blockchain is secure and privacy protected.
How? Just like you need an email id (shareable) and a password (confidential) to log in to your email, similarly, you also have a ‘public address’ and a ‘private key’ for blockchain technology.
This public address is a combination of random numbers and letters. Others on the network can view this public address but not your name or any detail.
Drifting to the Future
People used the barter system when no one knew of the concept of money. Then came gold or silver coins. When their weight became an inconvenience, people moved on to paper currency. Then came the age of digitalization, so mobile banking was the food.
With the pace that technology is advancing, the big bombs called blockchain and NFTs are dropping whether people are ready or not.
By establishing a secure and transparent network, gradually sliding us to the future, do you think the future will be a happier paradise or a robotic dessert?
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