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NFT's... Do you research

by James Warner about a year ago in blockchain
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If you want to buy an NFT, or are selling one, do your research so you can be informed on exactly what you’re getting.

NFT's... Do you research
Photo by CardMapr.nl on Unsplash

If you want to buy an NFT, or are selling one, do your research so you can be informed on exactly what you’re getting.

TLDR: You might just be buying or selling a digital address that points to whatever digital item you actually purchased. And that digital item might just be stored on a regular old web server. It could be better to just get the digital file itself and keep it on a flash drive, or in your own digital vault without having to pay gas fees.

I’m not a computer scientist or an engineer. Just someone who likes to read and know what I’m spending my money on. I love digital art, and love to hear when artists are successful at their craft and can make money doing so. With that being said, I still don’t understand why “minting” or NFT’s are getting such huge coverage.

Even MKBHD who is a well-respected tech Youtuber chimed in https://twitter.com/MKBHD/status/1375231197949919232?s=20

Do you remember Napster? Usenet, IRC, Kazaa, Limewire sound familiar? I experienced all of these growing up, and to me, NFT’s (Non Fungible Tokens) sound like the same thing, just packaged in a different way using different terms. Maybe I’m thinking about it wrong, but at least I’m thinking about it. You should too.

In my determination to understand NFT’s, I have read a lot of information on sites such as https://ethereum.org/en/, https://rarible.com/, https://mintable.app/, https://opensea.io/, and a few others that aren’t as popular or have as much information. I also bought some digital currency and created an NFT auction on Mintable.

Right now, if you are a digital artist, you can take your latest piece and “mint” it so it becomes a tradable NFT. In order to mint it, you go to any site that offers the service and upload your digital art file. Depending on who you use, you either pay a fee upfront to mint it, or the fee will be paid once someone buys it. So be prepared for those fees when you either buy or sell.

Most of these sites take some form of digital currency as payment and use some sort of blockchain technology to conduct the transaction. In a lot of cases, this is the Ethereum blockchain and the currency is ether or (ETH) on the cryptocurrency market.

So, I have my digital currency, and I have uploaded my digital file to mint. Where did I upload it? Well, it goes to the minting company web server who is going to host the sale for me, OR, I use IPFS which is a peer-to-peer file system to store it. Remember Napster, Kazaa, Limewire? Those were peer-to-peer programs where people uploaded files and they stayed accessible on those networks as long as someone was running the software on their computer. They died off eventually. They died because people stopped using them and caring about them. When was the last time you heard of someone running any one of those programs? IPFS sounds like the exact same thing. You can read about it here: https://ipfs.io/#how.

So now my art file is either on a website waiting to be sold or on a peer-to-peer network waiting to be sold. If I decide to mint the file upfront, I have to pay what is called a “gas fee”. "Gas" is money you pay to people who maintain the computers maintaining the blockchain. Yep, it costs money to create and maintain digital currency and to perform transactions on the chain. The data is stored on computers, and people running those computers want to get paid. What happens when they get really busy? They charge you more money. You’ll hear people talk about waiting until gas fees go down before performing actions like moving your digital currency. If you don’t pay it upfront, the buyer pays it when your piece is officially minted. So if you’re buying, check to see if you’ll be paying any gas fees.

So your piece is now listed, someone buys it, and you got paid! Now the buyer gets their NFT that sits in their cryptocurrency wallet and no one else can get to it. You didn’t think the actual file was embedded in the blockchain, did you? Nope, it’s a link to the file that is stored wherever you minted it. There is a way to get the actual data contained in the file minted, but it is my understanding that is not how the majority of minting currently works.

So, as the artist, did you delete the original piece from your hard drive so there is only one TRUE original minted and out there? If you’re honest you did. If not, some artists just change a few things and go mint another slight variant. Some of them will mint the exact same piece and sell it again.

If you’re the buyer, are you sure you just bought an original? Since this technology is still relatively new to most people, you could be buying a link to a stolen copy off the actual artists web page?

Couldn't the artist just email the file to the buyer and delete the original? Absolutely!

And then the buyer has the only one and true original? Yep!

Isn’t that how tangible art buying works? Yes.

Why is digital any different? I don’t think it is. But a lot of other people do, and they’re spending a lot of digital currency to be a part of it.

People are paying huge prices to store the URL to a piece of art stored on a central web server or peer-to-peer network that could shut down at any time. Don’t say it won’t happen, because it has happened, several times in the last few years.

Just a suggestion. Before you go and spend ridiculous amounts of money to buy an NFT, consider contacting the artist to buy the original piece and put it on a flash drive, or print a physical copy. If the artist is honest, it will be just as valuable, and maybe even more so, in the future.

Again, I am not an expert, but this is how I’m looking at blockchains and NFT’s right now. I don’t have a lot of money to invest in crazy NFT auctions, but I do buy digital assets from artists on places like https://www.artstation.com/ or http://gumroad.com and would highly encourage you to do so as well.

Thanks for reading!!

blockchain

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James Warner

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