Guys, does anyone know the answer?
get how has blockchain paved the way for the impending growth of nfts? compare and c ontrast the platform’s efficacies. from screen.
What to Know About Blockchain, Crypto & NFTs
It’s hard to read an article, browse the internet, or watch TV without encountering the words blockchain, cryptocurrency or NFT. There are an uncountable number of ads for new products and services
Marc H. Trachtenberg
Greenberg Traurig, LLP
Related Practices & Jurisdictions
Communications, Media & Internet
Financial Institutions & Banking
Administrative & Regulatory
All Federal PRINTER-FRIENDLY EMAIL THIS ARTICLE DOWNLOAD PDF
REPRINTS & PERMISSIONS
Blockchain, Crypto & NFTs: A 5-Minute Primer to Help You Understand the Basics
Monday, March 14, 2022
It’s hard to read an article, browse the internet, or watch TV without encountering the words “blockchain,” “cryptocurrency” or “NFT.” There are an uncountable number of ads for new products and services that promise use of the blockchain to provide existing service offerings in a new and innovative way. You likely have seen ads on TV with famous athletes and actors telling you to buy cryptocurrency and seen stories on the news about people buying or selling NFTs, increasingly for mind-boggling amounts. Many of your favorite companies and brands may also now have NFT offerings. But what do these terms mean, and how do these technologies work? This short overview seeks to answer these questions in simple and relatable terms. As this primer attempts to simplify complicated technologies and systems, it should be noted that some measure of detail has been sacrificed for the sake of understandability. Similarly, these technologies are evolving rapidly, so the state of the market today may not be the state of the market next week or next month. In the meantime, this overview will enable you to discuss these topics intelligently with your company, clients, family, and friends when they come up in conversation.
What Is Blockchain?
Blockchain is a system for securely recording and storing information and transactions in a database that is duplicated and distributed across a network of computer systems. The blockchain database is referred to as a “ledger” and for this reason, blockchain is also referred to as “distributed ledger technology.” Blockchain ledgers can be made either public (like Bitcoin) or private (similar to a closed corporate intranet network). Unlike a traditional database which usually structures its data into tables, the blockchain ledger collects information together into groupings or units known as “blocks” that hold sets of information or data. The type of transaction and amount of data that can be captured in a block depends on the particular blockchain. When a transaction is entered into the blockchain system it is transmitted to a network of peer-to-peer computers that can be anywhere in the world. There are different protocols available for validating transactions on the blockchain. Bitcoin, for example, relies upon Proof of Work, whereby computers on the blockchain use their processing power to solve equations to confirm the validity of the transaction. Other blockchains may use other protocols for validation of transactions. Once the transactions are confirmed to be legitimate, they are chained together in blocks that are given an exact time stamp and a cryptographic signature called a hash. The blocks constitute the ledger to create a long history of all transactions that is permanent and generally immutable, i.e., it cannot be changed. Immutability is an important feature, because it means that if one block in one chain is changed, then the block fails. This makes it difficult (although not impossible) to change, hack, or cheat the system. For example, if hackers wanted to corrupt a blockchain system, they would have to change every block in the chain, across all distributed versions of the chain, which is highly unlikely from a technical perspective.
What Is Cryptocurrency?
Cryptocurrency or “crypto” (also referred to as virtual or digital currency) is a digitized form of currency or token transmitted on a blockchain. While initially each cryptocurrency could not be transferred from the blockchain it was created on to another blockchain without converting it through cryptocurrency exchange, there are now protocols like Polkadot which enable cross-blockchain transfers. Some of the most well-known cryptocurrencies are Bitcoin (BCH) and Ether (ETH), but there many others including Litecoin (LYC), Cardano (ADA), Polkadot (DOT), and Dogecoin (DOGE). The number of cryptocurrencies is ever-increasing, and blockchain technology enables anyone to set up their own blockchain and a unique cryptocurrency or token. Bitcoin, Ethereum, and other cryptocurrencies are typically purchased through cryptocurrency exchanges, which are analogous to traditional electronic trading exchanges that enable users to place orders for financial products such as stocks, bonds, currencies, commodities, and derivatives through a financial intermediary. Depending on the exchange you can usually purchase cryptocurrency with a debit card or bank transfer. Many of the popular exchanges do not allow credit card purchases. Those that do charge for the privilege, and in some cases can add 3% or more to your transaction. Additionally, even if the exchange would permit use of a credit card, most major card companies have prohibited purchasing cryptocurrency.
What Are Non-Fungible Tokens (NFTs)?
An NFT is a unit of digital data stored on the blockchain, but differs from cryptocurrency, which is fungible and interchangeable (i.e., one is no different than another, like any one dollar bill is no different from another dollar bill in value or meaning). NFTs are unique and noninterchangeable. NFTs use blockchain technology to provide verifiable proof of ownership of the item the NFT is associated with. Essentially, an NFT is a digital certificate of authenticity. NFTs can be associated with easily reproducible items such as photos, videos, audio, and other types of digital files, but have even been associated with more ephemeral things like a captioned moment in time, such as NBA Top Shot, which sells NFTs for epic plays in NBA games, or Jack Dorsey, who sold an NFT for the first tweet. Just as purchase of a limited edition signed and numbered print of a photograph does not transfer copyright ownership of the photograph to the purchaser, purchase of an NFT generally does not necessarily confer any of the underlying intellectual property rights (e.g., copyright) in the subject matter of the NFT. The underlying intellectual property rights (or some subset) may be transferred by a smart contract associated with the NFT, but caution should be exercised here to make sure that no conflict exists between what is in the smart contract and what is in the terms of the website or platform from which the NFT is created or purchased.
An Intro to Blockchain and NFTs
An Intro to Blockchain and NFTs What is a Blockchain? A blockchain is a distributed software network that functions both as a digital ledger and a mechanism enabling the secure transfer of assets without an intermediary. Just as the internet is a technology that facilitates the digital flow of information, blockchain is a technology that An Intro to Blockchain and NFTs What is a Blockchain? A blockchain is a distributed software network that functions both as a digital ledger and a mechanism enabling the secure transfer of assets without an intermediary. Just as the internet is a technology that facilitates the digital flow of information, blockchain is a technology that
AN INTRO TO BLOCKCHAIN AND NFTS
AN INTRO TO BLOCKCHAIN AND NFTS WHAT IS A BLOCKCHAIN?
A blockchain is a distributed software network that functions both as a digital ledger and a mechanism enabling the secure transfer of assets without an intermediary. Just as the internet is a technology that facilitates the digital flow of information, blockchain is a technology that facilitates the digital exchange of units of value. Anything from currencies to land titles to votes can be tokenized, stored, and exchanged on a blockchain network.
The first manifestation of blockchain technology emerged in 2009 with the Bitcoin blockchain, a secure, censorship-resistant, peer to peer electronic cash system. Because Bitcoin is accessible to anyone, it is an example of an open, or a permissionless blockchain.
Today, there are many forms of blockchain technology. Some blockchains have been designed to meet the needs of a finite group of participants, where access to the network is restricted. These are examples of private, or permissioned blockchains.
In addition to the secure transfer of value, blockchain technology provides a permanent forensic record of transactions and a single version of the truth – a network state that is fully transparent and displayed in real time for the benefit of all participants.
Regardless of the type of blockchain protocol that is deployed, blockchain technology holds great promise to transform centuries-old business models, paving the way for higher levels of legitimacy in government and creating new opportunities for prosperity for everyday citizens.
JOURNEY TO BLOCKCHAIN
Want more information? This research report, written by former BRI Managing Director Hilary Carter, provides an introductory overview of blockchain technology.
WHAT IS A NON-FUNGIBLE TOKEN?
When Saturday Night Live does a skit on non-fungible tokens, we know the concept has gone mainstream. SNL captured many people’s reaction to NFTs—one of confusion, incredulity, and eye rolling. But NFTs are here to stay, and they’ll serve an increasingly important role in our digital economy. So what are they and where do they fit in the blockchain ecosystem?
Remember, a blockchain is a piece of software that functions as a ledger distributed across nodes of a communications network. What distinguishes it from other online databases or trading platforms is its immutability: we can trade digital assets peer to peer, and no one can alter or undo those transactions without a majority of the network’s approval. That’s a big plus over the Internet.
At one end of the spectrum of digital assets are cryptocurrencies like bitcoin used in payment networks such as the Bitcoin blockchain. Bitcoins are fungible: that is, one bitcoin is equal in value and function to every other bitcoin. So if you have a contract involving bitcoin, you could replace one bitcoin with another bitcoin without breaking the terms of your agreement.
At the other end of the spectrum are NFTs: each token represents a thing of singular value. In a contract, you couldn’t replace an Andrew Wyeth painting with Mike Winkelmann art and expect no one to notice. NFTs span a range of unique assets—not just collectibles but birth and death certificates, deeds to property, and the identities of objects on the Internet of Things.
While the bubble around CryptoKitties—the original NFT phenom—may have deflated, the buzz around the auction of Beeple’s work revealed the potential of NFTs. It is an area of value creation limited only by your imagination, your technical ability to create it, and the marketing, accounting, and legal support to carry it out.
JOIN THE BRI COMMUNITY
Want more information? This guide, written by our research contributor Alan Majer, unpacks the concept of the non-fungible token with examples and covers what every professional and enterprise leader needs to know about this area of value creation.
Following are a few videos that are a great introduction to blockchain technology. For even more videos, please visit our “Blockchain 101” Youtube Playlist
BECOME A BRI MEMBER
How NFT Blockchain Is A New World Order Brewing For Art Like Never Before
The past decade witnessed an unprecedented change in how people across the globe approach money and finances. When blockchain technology, the holy grail for record-keeping systems, came in 10 years ago, it paved the way for cryptocurrency.
NEWS 10 months ago
How NFT Blockchain Is A New World Order Brewing For Art Like Never Before
5 min read Toshendra Sharma
Updated on Nov 21, 2021, 09:44 IST
The past decade witnessed an unprecedented change in how people across the globe approach money and finances. When blockchain technology, the holy grail for record-keeping systems, came in 10 years ago, it paved the way for cryptocurrency.ALSO READ: Amitabh Bachchan To Sell His NFTs, Throws Weight Behind Crypto In India
This decentralized digital money and payments system based on blockchain technology slowly became the dining room conversation for everyone with an expendable income. Non-fungible tokens (NFTs) which are minted versions of assets that can be traded on the blockchain have also garnered similar attention. This interest in alternative investments is on a continuous rise, giving India’s favorite investment - Gold - quite literally, a run for its money.
Jump To How NFT Digital Art Is Becoming the Archetype
Another change that has widely taken over and changed the way we do things is the adoption of the digital world. From how we work, eat, to how we make art - the internet has revolutionized everything.
Undoubtedly, the origins of man’s experiments with art can be found in cave paintings and, from there on, humanity has only progressed in the way it creates and receives art. This (typically) visual form of expression latched on to the trend, hopping on the bandwagon of the digital revolution. The artist has constantly evolved from who used to be the cave dweller, to becoming the Da Vinci, to the recent Hussain and eventually present day’s digital artist - immensely empowered with tools and capabilities.ALSO READ: Non-Fungible Tokens: How 'Punk' Crypto Trend Gave Rise To NFTs For Digital Art
Digital art is widely popular due to its interactive capabilities. The more artists venture into the virtual, the higher its value is realized. It is effectively the cheapest and quickest way to exhibit one’s creations. What’s more, one of the many reasons that digital as a medium is garnering the trust of the community is because it helps canvassing unprecedented and, often unknown, audiences. The accessibility of the art world thus stands forever increased.
The downside of this is that far too often, artwork - whether audio or visual, gets stolen on the web. After investing long hours and creative sparks on what could be one’s version of ‘Mona Lisa’, artists are robbed of the credits.
How NFTs Offer a Solution
pixabayALSO READ: You Can Download 'Every NFT' Art On This Portal Inspired By The Pirate Bay
Even though copyrights exist for the same reason, the biggest challenge they pose is information overload. Due to multiple points of entry at multiple locations, it is impossible to keep track of everything. Non-fungible tokens record the proof of the artwork’s uniqueness on the blockchain, making them immutable and thus of monetary value.
- Ownership, Credits, and Credibility
Backed by the blockchain-based certificate, NFTs represents an entitlement to its owner. A work of art created digitally can be copied innumerable times to produce an exact copy. NFTs categorically give creators something that cannot be copied - ownership of the work. Anyone can have a ‘Starry Night’ second copy, but only one person owns it. It is this ability to preserve credits which have resulted in the rush to tokenize non-fungibles.
- Profits and Revenues
To add a cherry on top, NFTs are also designed to enable royalties so that the creator gets a percentage of their creation - whether it is a GIF, audio, or an image, blows up and goes viral on the internet, increasing its value in the future. Given our experience in this new domain, we realized that Individual NFT artworks are among the most popular and valuable non-fungible tokens ever created with respect to profitability. In my opinion, NFTs are a boon to the aging art market.
- Platform Security
The NFTs are technology in its infancy. As NFTs become more popularized and popular among the masses, the charter and policy framework will become strengthened both nationally and globally. Creating positive regulatory framework and infrastructure will enable the growth of NFT marketplaces in India. The presence of finely chalked out dynamic policies and governance protocols around the technology would boost the early adopters. Also, as NFTs reach popularity, it has caught the attention of fraudsters who are posting fake artwork and even hackers. This is the reason where selecting the optimum and secure marketplace gives us an advantage.