NFT
When we buy a piece of art in the real world, its easy to verify its authenticity and prove ownership. But how do you verify digital ownership of a digital art, as one can easily create multiple copies of the same art? NFTs were created to solve this very problem of proving ownership. And its been possible now thanks to the blockchain.
In this week's talk, Amit and Rinat talk about NFTs, what it is, what problem is it trying to solve, what can we do with it and a lot more!
Transcript
Hi, everyone. Welcome to Tech Talk. A podcast where we talk about various technology related topics and try to dive deep into one of the topics every week. Today, Amit and I we are going to talk about NFT a really popular and much requested topic. NFT has been popular for quite a few months now. And it is something very interesting and it also goes along quite well with some of the other topics we've covered like cryptocurrency, Blockchain, CBDC then a little bit, etc. So, yeah, a lot of you have requested and it's a very, very trending topic, even in Google Trends and in many other social media platforms as well. We wanted to cover it. But we wanted to obviously know about this a little bit more. And we have some knowledge. We looked into it and we feel like it's very interesting to talk about it with you guys because a lot of people are willing to find out more. And what better way then for, then then then this this podcast. So thank you very much, guys for joining. And let's dive right in. So yeah. Amit, I'll start with a question. What do you know? what is NFT?
Amit Sarkar:Well, Don’t ask me now…..But I think I think yeah, I think we selected a good topic because in last in our last podcast, we spoke about Metaverse, and we said that one of the things that people can do in Metaverse is buy digital assets like a piece of land like a piece of clothing, piece of a house, etc. And in order for them to buy something online, which is very unique and it can't be replicated. You need some kind of a payment like a currency and that is basically being fulfilled by NF T's. And Facebook, and many other companies are now behind creating their own kind of NF T's and using them using it in their platforms. So I think it is the next big thing because if people are going to the digital universe, then you need some kind of token or currency and that will be one of the things. So NFT they stand for non fungible token, but that's what I know. Can you elaborate Rinat?
Rinat Malik:Yeah, sure. Sure. Sure. So just obviously, you know, because it's sort of cutting us new technology. Everyone's definition varies a little bit. But I personally wouldn't call it currency. These are like more of an artifact. Okay. So NFT stands for non fungible token, and although fungibility is an English word, it's no it hasn't been a very common list spoken word for until recently. So a lot of people don't understand what fungibility means. So let me let me give an example. For example, if you have a note, you know, if you're in the UK, you have British pounds as you know, five pound notes 10 pound notes, etc, or if you're in somewhere else. In America, you have dollars as pieces of paper, but they represent the representative value. And an important thing is each of the 10 pound note or a you know, $1 Note represent the same value. There are multiple copies. They all represent the same value. So basically, if I for example, take a 10 pound note and Moshe up, but then you know, open it up again, it's not going to lose its value, I can then give it to you, and then get to five pound notes in return. Or get another 10 pound note in return and you would be fine with anyone who had that property of note is called fungibility. So there are many copies of it out in the market, and they're all replaceable, replaceable by each other.
Amit Sarkar:Also, cash is replaceable. Yes. So, yes, what leads to another Bitcoin and you can exchange Bitcoin the values the same?
Rinat Malik:Yes, Absolutely.
Amit Sarkar:So that’s fungibility.
Rinat Malik:Yes. So these things are fungible. But the picture of Mona Lisa, that is in in museum Louvre Museum, I think it is. Yeah. So if you take a picture, go and take a photograph of Mona Lisa, the painting and then you print it out in a really, you know, high quality printer. It's still not going to be the same as owning the original Mona Lisa. That would be millions and millions of dollars or pounds, but that copy of that artwork is not going to be the same as the original artwork itself. And it's not just a picture of Mona Lisa, usually, all artwork in a way are unique in their, you know in their existence. So the artist, you know, purposefully create some artwork and that artwork the original piece is not replicable or copyable. And even if you do make a copy of it, the original one remains it’s you know, keeps its value. You wouldn’t transfer and even if it is that even if it isn't, even if it is, for example, in my definition of taking a picture of Mona Lisa, forget about taking a picture but really good artist if they copies the paints a Mona Lisa drawing, you know, atom by atom and it's exactly the same even then it's not gonna have the same value, even though they are materially similar or same even then the original one will remain it’s value. So this property, so in this scenario, the painting of Mona Lisa is non fungible because it's not exchangeable, like a note is not like a bitcoin is. So how do we sort of replicate this behavior is non fungibility in digital world. We can do it by sketching this information of ownership into blockchain. As we know blockchain is a public ledger. Everyone knows, you know, which account owns how much cryptocurrency or whatever. So it's publicly known who owns what, at which point. So, if we add this piece of information in the public ledger in Ethereum Blockchain or some new cryptocurrency blockchain stuff started like Solana I think one of them. They create smart contracts where you could add more information rather than just transaction information. You could say that okay, this piece of board ape which is a popular NFT is owned by this in a wallet or this person, because Wallet…..
Amit Sarkar:But a little bit hang on. So I have a question. So yes, you're right. We can store it in the ledger that this piece of information is owned by that person, but information on a digital platform can be copied. So like a computer file, so I can copy a Word document and I can create another one of course. So, how do you differentiate?
Rinat Malik:That is very interesting. So for example, Bored Ape is a very popular NFT and they have thousand unique pictures, which is what they represent and they are being sold in the marketplace. And you know, it's a digital image, and you could easily copy that image and, you know, save it as your screensaver. But the person who owns the image, as who officially owns it is declared in the public blockchain that this person paid and this NFT belongs to this person and it's everyone knows it's public and everywhere anyone can go and check it out who is the original owner? So yes, you can copy that picture. And you could print it you could, you know, frame it and hang it in your walls for several years screensaver, but you won't be owning the original image. Now, that's why a lot of people……
Amit Sarkar:Again I have a question. So if can’t own the original image, then can the person I mean, use copyright laws?
Rinat Malik:So yes, yes, if they wanted to, but right now in the NFT world, they're not really enforcing that if you'd like because this is not about people making copies or not because what happens is a lot of people are saying that, you know, what is the value? I can anyone can copy that, you know, what, what's the point of me and it's a digital image and you know, what's the point? So, to counter that the counter argument for it is that the Bored Ape club or this organization who released all of these, you know, 1000 images limited 2000 or 10,000 or however, they are going to be member of this exclusive clubs where there's going to be meetups where there's gonna be other benefits like you could only you know, enter exclusive area in in a particular place or you could only be invited to some event if you own this NFT of this project. So there are more benefit than just owning a digital image. But you could just be happy with just owning the digital image anyway, because that also you could you could then, you know, technically enforce copyright law and say that no one else can copy it. You can do that. But usually people are not doing that right now. But the whole point of NFT is that you're declaring the ownership to the world and anyone can come and check in the blockchain who owns this and that way, whatever the artwork is, you're the owner. Now, this is this is, NFT is very highly related with in the art world. Now, in art world. There are many things that are, you know that that works a little bit differently than then real world for example, you know, I could give you an example saying that there are three pieces of canvas with the same shade of shade of red, in side by side. One is purposefully drawn that particular shade by a very famous artist, and that's exactly the painting the completed painting. That's what they wanted that famous artist. They created that artwork and that is a shade of red, and that's it. And then the other one is someone else wanted to finish wanted to start a drawing and tape for as a backdrop just started, you know, a painting and this as a backdrop they created a red shape, you know, shade of red, onto the canvas and the other one. The third one is probably just how red The sky is on at sunset next to the Nile River, you know, and, and they're all the same shade of shade of red and there is no difference at all. Which painting is more valuable to you? Because materialistically they're all same exact same thing. Now there are obviously people would say some of them, one of them or you know one of them is more than the other and they will grade them 123 or whatever. And they will price them differently based on the desire. So in artwork in art world,
Rinat Malik:you know, the way things are priced differently and ownership is a very important, you know, very important thing. Who owns an art. You know, even though there are 1000s and millions of copies of Mona Lisa everywhere, everyone knows how Monalisa looks but I think someone would pay millions or even billions to be able to own the original Mona Lisa. Because it's the ownership of that original piece of art that is that has a specific value. So yeah, NF T's kind of ensures that whatever it is, it's a digital picture. or digital anything even it could be text or just writing or even an audio. But it can be publicly, you know declared to the world that I am the owner of it and no one can take that away the ownership there is no no one can replicate and no one can call you by selling you a fake because it's in the blockchain permanently etched who is the owner. So that's what makes an NFT you know, a valuable asset because you know who the owner is, there is no way of calling anyone. There is no way of faking an artwork. And you know, as an added bonus, now, recently all of these projects Bored Ape is just one project there are many other projects that are in there as well and their various projects. And these projects, the project owners, usually it's a company or a club, they give exclusive access to the owners. So that's another extra benefit of owning NFT. So I feel like that kind of covers everyone, anyone who is talking about what's the point of owning a digital one, which can be copied. So, yeah,
Amit Sarkar:I have a question now. So you've explained the definition and you've given why it's needed, but where is NFT in all this? Is it the digital asset? Is it the transaction in the Blockchain ledger? So what is the NFT representing So suppose I say, Okay, I have an NFT. So does that mean I have an original digital asset and it is now in the blockchain ledger, and that record I am carrying and that token is mine. So what is actually the NFT in all these different terminologies?
Rinat Malik:the NFT is the digital product in the sense of you know, as I used Bored Ape as an example over and over again, we there were various other I can't remember any other names at the moment. Bored Ape, is one of the most popular ones. So a picture of a Bored Ape, a cartoon representation. If you own an NFT basically you mean it means that you own that picture. Now obviously, that picture can be copied by everyone, but you are the owner of that picture.
Amit Sarkar:That picture. The original one?
Rinat Malik:Yes.
Amit Sarkar:But what about the creators? Do they not own? The Do they not have the ownership just because they've created it? Like an Artist?
Rinat Malik:So yes, you create or in the NFT world, you say you minted it in the blockchain, so an artist creates an art, a digital artwork, and then they mint it in blockchain. So basically, they publish it for the first time in marketplace, and then anyone can buy it. And when they buy artists usually gets a royalty. So every time it changes the hand, the artist will get usually 5% 10% or whatever the artist decides in the beginning, he will he or she will always get a percentage of the buying price, which is also very good for artists worldwide because artists usually don't get enough credit or enough. An artist could have emerged with this but they don't have enough exposure. So someone buys it for 100$/$400 and then they takes it to a really exclusive place and sells it for a million dollars but the artists didn't get anything. But in this NFT world, the artists will always get a preset percentage as a royalty every time the NFT changes or switches ownership. So that's also very good for artists. And yes, the artist, initially owns it as he or she created it, and then once they put it in the marketplace, which is minting it and then anyone can buy it and be owner of it. Artists obviously selling the ownership to the potential buyer. Now Yeah, so that's that
Amit Sarkar:that's the digital asset itself is an NFT and can I give NFT’s for free? Like create something and then I just give it to you and you are now the owner. I mint it on the blockchain ledger does it cost me anything if I mint it?
Rinat Malik:Yah…that is that is interesting. So there is quite a bit of cost associated with it. Now the cost no one else is you know profiting from it. Like it's not like a third party who's making a lot of money by you know, enabling you to mint it. Basically, minting means that you are basically adding this in the blockchain which means that you have to make a transaction in the blockchain. So Ethereum transactions have a transaction fee. Any transaction in any blockchain usually have some sort of fee usually, sometimes the less popular blockchains have free transaction but that's you know, there is usually a fee associated with it. And in Ethereum you call it gas fee, and depending on the time of the day and day of the week, depending on how busy the network is the gas fees goes up and down. Now you have to pay that gas fee to be able to publish it in the blockchain and then if someone wants to buy it, they have to make another transaction because that transaction will prove the ownership that this wallet owns this digital product now. So it has to change from this wallet to the other wallet to the seller wallet from the seller wallet to the buyer Wallet. So all of these things require transaction fees. So these are transaction fees by Ethereum blockchain network or whichever other blockchain network there is a transaction fees. So that fee can become quite high. For example, I have purchased a web three domain rinatmalik.crypto. And as a bit even though it's a domain it's also an NFT. and I attempted to publish it just for fun of it. I don't think anyone would want to buy rinatmalik.crypto my own name, but for the fun I just wanted to see like…and it was the gas fee was about $120 which I didn't think that was worth my fun. So I didn't do it anymore. But yeah, if you want to publish in order to sell an NFT and then someone could buy it for free but they would still have to pay the transaction fee to check you know, to add that transaction in the blockchain.
Amit Sarkar:Add that information in the ledger. So you mentioned about Ethereum and Ethereum is mostly smart contracts. Is there a contract where I say okay, I am the creator and I now pass the ownership of this particular digital asset to this person, say person A. I am person A, I pass the ownership to person B Rinat Malik. And then you it's a smart contract. It's there in the Ethereum blockchain. And then when you have to sell it to someone, you change that again, you write a new contract, and you say, I am Rinat Malik. Now. I mean, I forego my ownership and I pass the ownership to say Amit Sarkar back again. And that gets added to the blockchain right?
Rinat Malik:Yes, that's essentially what a transaction is in Ethereum blockchain and you know, that's the that's kind of the definition of smart contracts. Basically, in my mind, and I could be wrong actually. But, you know, in the blockchain, you're basically usually just, you know, in a ledger What do you do you say that transaction, you know, from this wallet to this wallet, this is the amount. Now, I think in smart contracts where you do extra is instead of saying this is the amount, you could say this is the digital information. So, this wallet to that wallet instead of the amount, the number of Ethereum coins, you say that oh! this NFT…
Amit Sarkar:Yah! Transaction works like that. We mentioned the transaction of between A and B but instead of transactions we can have a book we can have anything. It's for…
Rinat Malik:Yes, Absolutely, absolutely. And that's basically even that piece of information is the NFT. Now, just to clarify, I mean all of our examples, we're talking about images. It doesn't have to be images, it could be an audio file, it could be a text, it could be any digital information. That includes…
Amit Sarkar:So it’s like a tweet or an Instagram post, a Facebook video, YouTube video, news article…
Rinat Malik:So this is where it gets a little bit complicated because Twitter posts are owned by Twitter. How would you take ownership of that to be able to then later sell it? I mean, obviously, the code itself, the text itself, if you wrote it, and if you came up with that line, then you could say that I'm the owner of it, and this is my NFT I published it. That's a different story than a Twitter post because you know, anything in Twitter, which has got a number of responses, retweets, whatever that's up to Twitter's you know, world you know, that's not necessarily owned by you to get the characters in the text is own by you, but, you know, if you want to sell it as a Twitter post, that means that Twitter has some sort of association with it, which is not owned by yourself. So that's, that's a different, there has a bit more complications to it.
Amit Sarkar:Then say Taylor Swift Release is an audio file and she says that Taylor Swift owns the NFT and then she wants to sell that okay. I will sell the first audio song, first song that I ever recorded as an NFT to whoever is the highest bidder. Is that possible?
Rinat Malik:That is possible but it's really interesting that you chose Taylor Swift as a as an example because there is something else that's happening right now in the music world where Taylor Swift has done some, you know, some revolutionary situation where she published Taylor's version of some of our own songs which are which is a different story altogether, but it's also very interesting in terms of ownership.
Amit Sarkar:Taylor's version of her own songs…
Rinat Malik:basically, so basically, she, you know, a lot of the songs she wrote, and then she composed and then she sang and then she, you know, recording studios or publishing studios or these organization purchased the copyright of the song, you know, the voice that she sang because she's went to sing in the recording studio, the, you know, the publishing house. sponsored it and they own that, that music that was created on the day and then Taylor Swift obviously gave away the copyright, etc. It's in return of money, etc. But now, what she didn't do is she didn't sell the music composition of the song, and she's also the creator of the music composition. Now, when she came back and went through these contracts, she realized that she owns the music composition and now if she sings the song again and records it again. That is not owned by the publishing house,
Amit Sarkar:because she wants with it.
Rinat Malik:Yeah, because she's the one who also wrote the music. She could just sing it again. And then own the whole thing again. So basically, that's why you would now if you go on YouTube or Spotify or various other streaming apps, you will see various a Taylor Swift you know, some popular song and then there is a Taylor's version in bracket of the same song. But that is Taylor Swift, sang it again, and added with the music composition that she created and she didn't sell the copyright of the music composition so she could do whatever she wants with it so that you know, kind of took the music industry by storm because these publishing house yes, and they lost a lot of money because of it because you know, Taylor Swift kind of took away that opportunity now. Obviously, you know, to publish a song as an NFT, it's possible to do that. You need to be owning all aspects of the lyrics or song, the music that goes with it. So you gonna make sure that you own in order for you to be able to sell or it could be a publishing house who, who owns and who paid three different people, the lyricist, the music composer and then created a song and then the publishing house owns everything and they can sell it or minted as an NFT. Yeah, that's also possible. So
Amit Sarkar:it's like trading art. So art goes from one hand to another hand. It's an original piece of work, it goes from one hand to another hand, and an NFT can go from one hand to another hand, and whenever it changes hand, that person owns the original version of that particular digital asset. So now it means that if I own a car inside a Metaverse and I have created it, or I bought it from someone, then the ownership is mine. And no one can say outside the metaverse as well. That car doesn't belong to you. It belongs to the company. That's hosting the Metaverse. Is that correct?
Rinat Malik:Sorry, I didn't fully catch you…
Amit Sarkar:Basically, I have I own a car inside the metaverse paid for it. And I have the ownership. It's an NFT. Outside the metaverse, no one can say even the people who have created the metaverse that. Okay, Facebook is not the owner of that particular car. Amit Sarkar is the owner of the car.
Rinat Malik:Yes, yes. You I mean, that's the beauty of NFT and that’s why Metaverse to talk to other companies virtual worlds as well because the ownership of your car is not controlled by Facebook or Google or Apple or anyone. Whether the whether or not you own the car is etched in blockchain that you are the owner of that piece of digital asset. Now Facebook could honor all the assets owned by all of in that blockchain. In that case, they will also have to honor yours, or Facebook could decide that we're not going to honor any NFTs or any assets in Ethereum blockchain, which is obviously very unlikely and it's detrimental for their business to do that because but yeah, so if you own you know, something, and it's, you know, minted or etched in blockchain Ethereum blockchain or whatever, then the ownership is determined by the blockchain. It's a public ledger, no one can change it. No one can has any authority of it. And if Facebook owners all the assets owned by everyone in Ethereum blockchain in Metaverse, then all of it will be there for everyone.
Amit Sarkar:Oh! That is interesting. So that takes everything to the whole new level because now you can buy anything. Prove your ownership move from one place to another. It's like driving a car from one city to another. And you're still the owner of the car.
Rinat Malik:Yes, yes, absolutely. It's there are so many potential of when you merge all of these new technologies together. I mean, it's just, it's just mind boggling how advanced
Amit Sarkar:so like, okay, so I will dig a bit more deep. So I have an audio file. Say I'm a studio I have an audio file, and I push it out, and people can buy a copy of the audio file. They don't own the original but they buy a copy. So every time they buy a CD, they buy a DVD, it's a copy of the original song. And I can make a lot of money. If I want to sell the NFT I sell the ownership. And I sell it for a million dollars, and someone that can enforce copyright so I then cannot sell those DVDs or CDs in the future because I don't own the copyright anymore. I've sold it for a million dollars to someone else and they own the ownership. And so they exercise their right to prevent copying, or they can ask for money in return. So that's, that's one thing. And then so why would someone want to sell an NFT instead of selling copies of it because they can mint more money out of it right? Once you sell the ownership, you lose a mechanism to make money out of it. It does make sense I understand but why would say a studio lose ownership of something that it can make money from Forever say…
Rinat Malik:it's the argument of selling or buying anything really. the person who's selling it has less value to them than the person who was buying. So you know when…an interesting quote I've come across recently in stock market, right. You know, also many we know big institutions and you know, Wall Street investors and educated research analysts. They're all buying and selling you know, a very expert persons is deciding to buy the same share. That someone else was also, you know, probably very much expert is deciding to sell it. They're both thinking they're doing the right thing. But you know, whether it's right or wrong, no one knows at that point. So, you know, it's about buying and selling. So, you know, say for example, you know, somewhat you created a music and you know, you can you know, let people stream for a charge or let people buy a copy of it, and you can make money. But you might think that the amount of money are making by streaming, I would rather sell the copyrights or let someone else make that money but I want an upfront you know, cash in hand. $1 million for whatever you decide that your cash flow is more important to you. So you want to sell it or you might decide that you know what, I want this to continue, so I will keep selling it, etc. So it's about that decision. So someone might want the cash flow, someone might want the upfront lump sum or someone might want to continue based on that they make that decision of buying and selling in their artwork. And that is the risk. That's why I mean some people you know, obviously regretted selling because after that, you know, it became very popular and viral like apple you know, Apple shares you know, there was one owner of apples share at the beginning
Amit Sarkar:you keep reading about that he would have been like a millionaire a billionaire by now.
Rinat Malik:Yes…So that kind of story. So, yeah.
Amit Sarkar:So, so as a person, so I understand what an NF T is. And now I'm eager to buy something say for 10 pounds. I want to buy an NFT. Where can I actually buy NFT ? and how can I create one?
Rinat Malik:So in terms of creating one depending on your standard of quality, you probably already have everything that you need to create. You can just create an NFT out of the last picture you've taken in your phone so you don't necessarily need to on purpose go and draw a digital drawing you could just add make anything into an NFT. So in terms of how to create one, the digital product itself it's you know if you're a digital artists and if you're a creative, really nice image or draw one that's up to you, but you can just use your last photo or any photo that you have, or any image or any video or any audio file, whatever you could just record yourself singing a song very badly, and then, you know published as an NFT. I'm not saying you will be badly…I would be badly but it doesn't have to be a professionally created piece of artwork. Now, when it comes to publishing it
Amit Sarkar:No, no, hang on, hang on. So I want to get this correct. So I have a photo and I create an NFT. And in order for me to create an NFT I need to do an Ethereum transaction. It could be Ethereum or it could be anything and then I need to record that I have created this photo using my phone this date. And now it is etched in the blockchain. Now whoever is so I just wanted to understand this process…
Rinat Malik:Of course Of course……So this is you don't have to record any of that you basically have a digital asset which is a photo and you want to make that transaction which is the first transaction which will add that photo in the blockchain for public to sort of acknowledge now that's called minting. That's the first time you are adding that digital image or digital product into the blockchain. Now, first, you have to decide which blockchain you want to publish to. Ethereum is the most popular and also it's the most expensive one. So other will cost you as well as it will cause other people to buy and sell. So you might want to think about that. There is polygon, I think it's another blockchain, which is free as of last two months ago when I checked, and both of these blockchains are available in a very popular NFT marketplace called opensea.com or IO, I don't know but if you just Google Open and see as in the, the body of water as the sea, open sea. And then the first result should be that website is very popular for the marketplace. We're not sponsored by open sea or any other marketplaces. There are quite a few Google best NFT marketplaces. There are quite a few there is variable, there are various other and some of them who specializes in different kinds of artwork or different kinds of benefits or properties, etc. So do your research on checking out which one you want to start with. But open sea is the most popular one as far as I know. So you can go to open sea and then you create your account and there is a button or place where you can click on mint, minting your NFT which basically if you go through that process of uploading your image or audio files or video files or whatever, it's your digital product, and then you pay the fee they will do the etching. They will do the adding into Ethereum blockchain or whichever blockchain they probably offer two. Ethereum and Polygon might be getting the second name wrong, but they will see the options.
Amit Sarkar:We can do some Google search and then we can publish it.
Rinat Malik:So yeah, and then you basically go through the minting process and then you basically minted it and then pay the fees if necessary, and then it's available for anyone else to buy. And it's also kind of listed in open sea marketplace. For anyone else to see and buy. They will also be able to see how many people bought in the past who get what prices and all of that history as well. You could also add more description and stuff how and when it was taken or recorded and then you know what extra benefits they might get, you know, you might release like 10 images of random things, but you could say that whoever these 10 people who owns this 10 images, they will get one hour of consultancy time with Amit Sarkar every month. So you could tell that you could basically you're basically telling them you know, they won't just own that digital product, but they will also get this side benefit of it and that side benefit might be more valuable than anything else. And you know, that way it's more precious more people would want to buy it because you know, you were, you know, established professional people would want your consultancy for their testing and other technical leads, and they might actually want to buy the relative just to be able to talk to you for an exclusive time with you at one hour every month or whatever you would specify So yeah, that's how that's how it goes at the moment.
Amit Sarkar:So you said, We can select any blockchain. What happens to my NFT if that blockchain disappears tomorrow?
Rinat Malik:As far as I know your NFT will also disappear unfortunately, that's why you want to choose a blockchain which is you know, quite established like Ethereum that's why it's expensive right. Polygon is also quite popular. But again, you know, there are you know, all of these cryptocurrencies with different blockchains like Solana like Matic, and these are providing their own blockchains which are less expensive, but obviously, you know, there is a chance that that might come to an end. Very unlikely though, I mean, these, some of the top 10 or top 20 crypto currencies reached quite high market cap and even though right now the market is going down quite a bit even then they are quite established. And a lot of assets a lot of artists and a lot of people have put a lot of assets in and so in large number of people has invested interest for it to not go down. So it's not just the company that's running it. It's now in public you know, in the hands of public.
Amit Sarkar:If someone I mean, if you're minting it of course, you're paying a fee to the person. So I am paying fees to Open sea as well. And if they are making money, it's in their interest to maintain it. If no one is maintaining it, no one can make money
Rinat Malik:and if you own it,an NFT and if you published in say polygon blockchain you're also interested you're also you know, you also don't want to Polygon blockchain go away. It's I would say these are, you know, quite unlikely scenarios and, you know, the chances of that happening could be, you know, compared to, you know, a small country's government falling down. So, you know, you might, you know, obviously we take calculated risks, and I, in my opinion, and this is not a financial advice of any sort. The probability of that happening is so low that it could still go ahead with some confidence.
Amit Sarkar:Okay. Thanks. Thanks for clarifying on those. So now we go into buying NFT, so if I want to buy an NFT, say, Taylor's version of her song, where do I go and buy an NFT?
Rinat Malik:So again, you go to an NFT marketplace, you know, like open sea and many others. So obviously, artists published their NFTs in different marketplaces. So whatever you want to buy might be available in a particular marketplace. You go to that. Go there or you go to a marketplace of your choice, and then find whatever you like, whatever is listed now you in order to buy something you have to have some money in your wallet. So when I say money, I you know, nowadays money is cryptocurrency. So if they're charging Ethereum then you have to have some Ethereum in your wallet, the wallet that you're going to pay from. Now recently, I've heard some scams and some, you know, events where people lost money because there is a vulnerability where you know, when you're paying I don't know exactly that part of the story. So I'm not gonna go into too much detail without knowing. But there is a vulnerability where while making the transaction, someone could probably take other cryptocurrencies that are stored in the same wallet or something similar
Amit Sarkar:Is it only a particular marketplace or any marketplace?
Rinat Malik:It Could be any marketplace. It's a thing about the wallet rather than the marketplace. So what I would advise is say for example, you have a main wallet say in Coinbase, or Binance or your own, you know, independent wallet, only transfer the money to your buying wallet where you're going to pay from the amount that you need to just pay for whatever you're gonna buy. So say for example, you go to Open sea and you find an NFT which is you know, they're selling it for one Ethereum so transfer in your Open sea wallet or meta mask or some of the popular wallets that are attached as a as a Chrome extension or whatever. You have, say for example, five, five Ethereum in your coin base wallet or your main wallet, which is not linked to anything else. Don't transfer more than one Ethereum to the Wallet where you're going to pay from. So you transfer from your main wallet to your know paying wallet One Ethereum and then you go to Open sea you pay for that NFT with one Ethereum and that's done.
Amit Sarkar:So they won't get the other Ethereum.
Rinat Malik:Yeah, so that's, that's something to keep in mind that is recently happening. I've heard and you know, something to be careful of.
Amit Sarkar:Okay, so we have created an NFT we have bought an NFT. And I'm guessing it's the same process for selling in NFT. You put it on the marketplace, if anyone is willing to buy. The other thing is once I buy an NFT where is it stored? Is it still stored in the marketplace? Or what happens to that NFT?
Rinat Malik:So you can decide to make have it remain visible in open sea or any other marketplace. But is stored in the ownership information is stored in the blockchain. So even if you don't, you know, put it up for sale. Someone can go to the blockchain and see that you own that NFT. But as soon as you buy, it automatically kind of gives you the option that do you want to relist it so someone else can buy it if they want to. And then you can set a price and whatever.
Amit Sarkar:Oh, interesting. So I can re-list it and say what to download that asset and take it off the marketplace. Can I do that?
Rinat Malik:So you can download it but downloading doesn't really mean anything because anyone can download it. Right? It's the ownership…
Amit Sarkar:but the ownership is of the asset. So if that asset is in the Cryptos in open sea, then how am I the owner it's like I buy a car but it's always in a garage of the car manufacturer or the market ?
Rinat Malik:This is very interesting because yes, you buy a car you get the registration papers so you're the owner of the car, but a digital image is you know car has a function that you know, go from place A to B by a digital image doesn't have a function like that. Now…
Amit Sarkar:it has so I can I can use that image as my profile picture. I can use that as the wallpaper and use it in my screensaver. I can use it as a phone wallpaper. I can I can do…
Rinat Malik:Yes, yes you can do all of that but anyone else can also do all of by downloading.
Amit Sarkar:I'm the owner. And so I pay money. And then I own that asset and that asset is there in open sea. What's the point but then how do I move it from open sea to some other marketplace?
Rinat Malik:It is not necessarily in open sea. it listed in Open Sea, but the fact that you own that digital asset is, you know, recorded in the blockchain.
Amit Sarkar:So, is it like the registration paper? that okay, I am the owner of the car and the car is in that garage. I take it out from that garage and I move it to another garage. The thing is….
Rinat Malik:Yah…but DVLA knows that you own the car.. In UK DVLA.
Amit Sarkar:So suppose I buy the asset in open sea and then I want to sell it on a different marketplace. Can I do that?
Rinat Malik:I have not personally done that. So I don't want to say with too much confidence, but I would imagine you should be able to do that because that information is independently in its area more whatever blockchain and whichever other marketplace also, you know, sells and buys and sells in that blockchain should be able to just find your assets straight away as soon as you give them your wallet address. So Yes.
Amit Sarkar:that's how I should work in Metaverse, right? Because if I buy a thing in Facebook's Metaverse, I need to be able to go to some other Metaverse say, Apple, Google and I should be able to use it because it
Rinat Malik:Absolutely. That is my understanding. The only reason I'm not confidence because I haven't done it myself yet. But what I understand and what I what I know and that is that is absolutely the case. Yes.
Amit Sarkar:Okay. Now this has this has been very interesting talk. I think it gives you a whole idea. I was on to be honest, I didn't know much about NFT except the full form. Fungible means so thank you so much for explaining that. And I think we have gone through the whole journey of how to create How to Buy How to Sell ,Why we need it. What can you do with it? What are the application and why now? I think we also need to answer the question of why now and the reason why now is because of blockchain because blockchain existed before. Because This is one of the applications of blockchain.
Rinat Malik:Yes, that's what that's what enables this kind of artwork. Before it was. I think there was a famous story where I think Hitler Hitler's right hand man, he was an avid art collector. And then there was a con man who could you know draw, you know, exact replications of various famous drawings and this con man t sold a painting that he sort of copied as original and this this person before he was, you know, executed or something. He was told that look, that painting that you owned with a lot of money. That was actually a fake painting, and he is fairly sad that he's first time he's heard of evil in his life, is how the storyteller described it. But yeah, basically this kind of corn or fake work, it's just impossible in NFT worlds because everyone knows who is the owner. Even then then newest forms of scams and fake that's, that's a different story. And it's happening of fake. You know, some, like, for example, bored apes that the ones that I've said, so they released 1000 or 10,000 copies of different apes. That company is the owner and, you know, once they got popular and other companies sort of named it something similar Boarded ape123 And then they published another 1000. You know, trying to imitate the popular one, but a lot of people also paid a lot of money divided by that wasn't the original company released digital assets. But then, of course, humans will find ways to new ways to scam
Amit Sarkar:Yah! this regulation because the market like anyone can create a marketplace where you can buy and sell NFT I think it's very important that governments I mean, not immediately because it's still I think not that popular. Once it gets very popular once Metaverse comes once actually people want to start buying and selling digital assets and even trading. I think then you need some kind of regulation to protect people's assets or money. I'm not sure if it's the regulation to be governed by the government or it's an understanding or a standard by the big companies that tech companies. But I think it's needed because you're right. Such scams can easily happen because I just created a marketplace out of nowhere. And I did these 1000 badges out of nowhere, and I charged 1000 pounds per asset and I make a lot of money. And then I just disappear !
Rinat Malik:Yeah, there are various scams. I mean, we could just have another episode of all the different ways people are making and scamming different money. NFT is also like a hotbed for money laundering as well. So there are various negative correlations and every negative things that are associated with it are wicked. If you're interested, I can go through in detail in another episode that will take about an hour for sure…
Amit Sarkar:We can do that I think online scams or just scamming yah.
Rinat Malik:or just scamming in NFT that will make an hour.
Amit Sarkar:Oh! Scamming in NFT !!! OMG!
Rinat Malik:so yeah, of course for other you know, visibility. We should also do online scams and other time but yeah, definitely but NFT the point of blockchain is that everything is public and everyone knows who owns what so that's the benefit that you know, Blockchain on NFT gives. And just going back to the example you gave about cars that you own a car but this is where people might initially get, you know, a little bit apprehensive in terms of owning NFT because cars has a function and your digital image that you own in the left it doesn't really have that function. But let me go back to Monalisa picture again, the Mona Lisa, you know, the image the actual painting, it doesn't really have a function other than the fact that you can look at it, but you can also look very high resolution copy of it and get the exact same you know, visual, you know, either way, but the fact that you own the real original painting of Mona Lisa is something else even though …
Yeah, so that ownership is what is important in NFT world but again, as I said, you know, it could also come with the function for example, if you had 10 You know, Amit Sarkar logo that you sold as an NFT and they will get one hour of their consultancy time for 12 You know, 12 times every month or once every month then that is a function that they are getting out of owning the NFT. So, absolutely. There could be functions, but that is added and you know, if you're buying an NFT, if you're buying it for functions that you should really should look at all the projects and what they're offering on the side as well as owning that NFT. And also again, going back to scamming a little bit, there could be companies who are releasing and promising a lot of functions like exclude exclusive meetups or invitations of something or boat party or whatever, but there might not follow through with it. So you want to do your own research if you're going for that. Part of the value, but NFT promises value of ownership and that's what you definitely get whatever it is.
Amit Sarkar:Okay, so it's a very gray area because, I mean, we talked about NFT's but because of all the scams people might be apprehensive, even I'm apprehensive now if I own something. So, so let me get this straight. So it's basically you're buying something and then you're trying to sell it. At the moment, that's the function. You claim the ownership and we are not that rich. I'm not that rich. So I'm not like a millionaire or billionaire. So basically, I can't buy say Taylor Swift, Original Song for a million dollars. So I'll buy just a digital image for fun. And because I bought it for fun, and I can't do anything with it. I just want to sell it. So is it buying and selling NFT is just like buying and selling stocks?
Rinat Malik:No, no, no. No, at all. No fully. I think it's more like buying and selling artwork.
Amit Sarkar:Buying and selling Artwork okay,
Rinat malik:Yes. So artworks function is different to different people. You might, it may might be really valuable to you to own an NFT/ that particular NFT but it might not be anything to some other people, but it might be a lot more valuable to someone else. So yeah, right now, you know, you might just buy a digital asset of anything, which is not very much pricey, maybe $200 or whatever. And then maybe after a year, that particular piece of digital art ownership becomes really valuable and then you get to sell it. But you know, you might just be buying it for the very fact that you own that piece of artwork. So it's more like owning a piece of artwork rather than stock because the stock has a lot of other things associated with it, which is not…
Amit Sarkar:Make sense. Make sense. So it means that I can buy a digital asset today and I can hold on to it and sell it maybe 10 years in the future because I know that the value will increase and it'll you hold. It's like, you know, I mean, I had a colleague of mine, ex colleague, and he used to collect these video game cartridges, Nintendo Sega cartridges, and he used to collect based on the catalog. So Nintendo Sega these two publishers. And in that catalog, they would mention the games and he would try to collect that. And then I mean, it's like artwork, so he used to trade it for another asset and make money from it. He was the collector as well as trading it for money as well. And he was saying that see, no one is playing with cartridges anymore. So their values are increasing. The value of owning a cartridge is actually increasing. And there are people in the world who are willing to pay for it. It's like artwork, so the more older it gets, the more valuable it becomes.
Rinat Malik:Absolutely. I mean artwork has no form really, I mean, you know, it could be like 50 year old baseball cards, a lot of people sell, you know, some of those sell for 10s of 1000s of dollars and these cartridges as well. Yes, I'm aware of it. Yeah, I mean, you know, it could, you know, someone a millionaire could be reminiscent of these things, you know, at their last ages and they could pay good money to buy those cartridges just to be able to reminisce their childhood, or it could be it might mean nothing, for example, someone like me because I've never, you know, been too fascinated about it. I did own some, you know, some game cartridges, but as I grew up, I kind of grown out of it. Very I did it's different value for it to different people. But yeah, you never know what would be priced at what level when it's when it's considered art.
Amit Sarkar:Okay. Well that was a good conversation Rinat, about NFTs and I hope our audience finds it very interesting as, as I did, because it's I think it's a whole new world out there. It's still a very it's early stages, the technology is still maturing. There are a lot of things that people have to be aware of which I think we have covered a bit. So I just hope that whoever is from our audience is trying to buy an NFT they just take extra precaution and just be extra careful. You are going to take the risk by buying an NFT so just be aware of it. And try to do your homework. And yeah, it's a fun piece of technology. It is going to boom, sooner or later, thanks to the blockchain. So yeah, read more about it. And yeah, enjoy.
Rinat Malik:Yes, yes, absolutely. As Amit said do be cautious about it. But I would still say don't be too aggressive. do it still do go and buy one and play with it is worth it and there is much a lot of potential for it. To go a lot bigger than what it is. It's still at its infancy the technology. So yeah, do your homework and all of the cautious things that Amit said but I would say then then after that go and do it still. So yeah, thank you. Hopefully I've explained it well, and hopefully this talk was helpful to you guys. And please let us know what else you want us to talk about. And thank you very much for listening. Today. The audience and hope to see you guys next week.
Amit Sarkar:Thank you guys.
Rinat Malik:Thank you.
