What are NFTs and the Blockchain? — Explained in plain English

With everything going on on social media and the world, you’ve probably heard the terms “NFT” or “Blockchain” before and wondered what in the world they are. Well, lucky for you this is an explanation of these crazy technologies in plain English; no fancy buzzwords.

What is the Blockchain and how does it work?

You can think of the Blockchain as a database distributed over millions of computers.

1. Let’s say your friend Bob wants to send you 10$, he will tell the system who he is sending the money to and how much he is sending.
2. To send you money Bob will use your public key (Think of it like an email address people can send stuff to) and you use your private key (Think of it as a password) to access the money in your wallet. A private key should be never shared so bad people can not steal your money.
3. When Bob makes the request to send you money, the system selects three random computers running the blockchain and they play a guessing game to be the one to process the transaction. If they are the computer selected to process the request they will get money in return.
4. After the request is processed and verified (the system says Bob has 10$ he can send you) a data block is created with the transaction information. And “chained” together. Which is where the name “Blockchain” comes from. Blocks of data are all chained together.

5. Computers that run the blockchain are called “nodes”. You can think of Bitcoin or other popular blockchains as software you download on a computer. Once it’s downloaded the Blockchain (Again, think of it as a big database) is copied into the computer.

So, what makes the Blockchain special?

• Let’s say, John, the bad guy wants to make it seem like Bob sent the money to John instead of you. Since all the computers on the blockchain have a copy of the transaction information, when John tries to modify the transaction the other computers reject the change. Without a majority of other computers agreeing to change the information John can not individually change anything. This is one reason the Blockchain is soo cool, the data is more reliable and secure.
• Another factor that makes the blockchain more reliable is decentralization. If we think about a big company like Google it’s one single organization managing a very large database. Almost every single one of us reading this article has some sort of data on Google services. What if one of Google's engineers wrote faulty code and took down the whole database? The results would be devastating even if it was down for a few minutes. Billions of people rely on the data Google has to do work, go to school, etc. The power of the blockchain is the fact that millions of computers run it so one node failing does not take down the whole system.
• Imagine if a bank had to show every single transaction that happens through them. Seems impossible right? Well, with the blockchain everything is open-source. Meaning while keeping users anonymous the blockchain shows records of transactions so no one can deceive one another and everyone is aware of what is going on.
• Enables people to move money as they wish without having to constantly report to a bank. In today's world when interacting with banks to conduct transactions, one needs to endure a long and bureaucratic process. There is so much paperwork and hurdles involved. Especially when you’re trying to move money between countries. This is what makes money on the blockchain (“cryptocurrencies”) so special, the money can be moved easily without a million hurdles across oceans, borders, religions, ethnicities, and so on.

These are just some things that make the blockchain interesting, this is really just a high-level overview of what is the world of Blockchain. There's definitely a lot to debate about and develop!

What are NFTs?

Let’s say you have an MP3 file of a song you made and you want to own the rights over it. Normally you would have to copyright with a government entity. With the blockchain, using Non-Fungible Tokens you can assign a token to the MP3 file that proves you are the real owner of the song.

This creates a new method of registering and dealing with Intellectual Property and Copyright. Furthermore, you can trade NFTs and get royalties every time it is bought and sold. How cool is that? You could have a constant income as a creator.

Some other benefits of NFTs

• Since NFTs are on the Blockchain the data is a lot more secure and reliable than it would be in a government database. We know no one can edit the owner of an NFT.
• Artists and creators alike offer underlying benefits for NFTs they sell, creating a whole new way of providing services and monetizing as a creator. For instance, entrepreneur and influencer Gary Vee created digital art in the form of NFTs (VeeFriends) his fans can purchase to get on a one-to-one call with him.

Conclusion

That’s it for our explanation of the Blockchain and NFTs, there is quite a bit to debate and learn when it comes to this topic. The NFT & Blockchain landscape is changing every day with an increasing number of creators building their own vision of the future!