IPFS and Non-fungible Tokens

IPFS MAIN Interstellar Continent (IPFS and non-fungible tokens)

Interstellar Continent builds a new generation of Internet foundation, public account: IPFS Interstellar Continent

At the Ala/34 conference in Rome, I was asked to prepare a speech on blockchain use cases, which was a natural evolution of the speech that Gian Luca Comandini gave at the birth of Bitcoin and blockchain that night.

 

Therefore, I started to prepare content about IPFS and cryptogattini. I have discussed IPFS on the blog here, and only cryptogattini is discussed in the main category of DoubleBit.

 

Through the button below, you can download the slides of my speech, and further, you can read the full transcript of my speech in Code4Future (an event organized by HTML). The event was held at the Talent Garden in Ostiense, Rome, on November 9th.

 

 

IPFS: Interplanetary File System
IPFS: Interplanetary File System

 

You are all ready! Now you have a wallet that only you control, without the need for an intermediary or banker.

 

This app is actually a test because the Telegram blockchain does not currently exist, but it is a great way to see how a wallet that is owned only by someone with a private key works. With my address, people can send me GRAM (Telegram Token), but the most important thing to remember about the wallet is definitely the private key.

 

This is a private key, I hope there is no relevant funds. A bit like a password, the private key is a string of variable numbers (based on the reference blockchain). Some blockchains have private keys longer than 80-90 characters, such as the seed of an IOTA wallet.

Compared with atoms in the universe, this code has more possible combinations. 2^91 combinations, a huge number. For ordinary computers, even for supercomputers, it is difficult to guess such a password through trial and error.

 

If no one knows the project I am going to talk about, I will feel very happy, because otherwise my work will be meaningless.

 

What is IPFS stand for?

IPFS stands for “Interplanetary File System”: it is an interplanetary system for data management. This has a lot to do with blockchain. When Bitcoin was born, its purpose was to give people who use the system financial freedom. Free the people from the shackles of banks.

 

IPFS is a project executed by a group of scientists/developers from the Massachusetts Institute of Technology (MIT) in Boston who hope to further promote the blockchain concept.

For them, the blockchain system should not only be tied to cash transactions, but should become the infrastructure of the Internet. In other words, the Internet as we know it should no longer be a system we can access, but other people own its infrastructure.

Today, for example, when we search Facebook on Google, we are:

Search Facebook by requesting Google

Show us what our friends are doing by requesting Facebook.

 

Not to mention all the intermediate steps you need to transfer this information. It only takes one thousandth of a second. Our most sensitive information, such as our IP address, our MAC address (a unique identifier for any device that can be connected on the network).

All companies we have experienced can use this information to understand our online behavior and sell this information to advertisers to tailor advertisements to our online behavior, which is almost always the same as the behavior in the real world .

 

IPFS assumes that there are more devices connected to the network than people today, and this number will only increase. For example, in Italy, each person has more than 2 phones.

The long-term vision is: “Imagine that if you don’t need the Internet, you can access the Internet.” If it is not longer, it may be realized in 50 years.

What they are doing today is to establish a communication protocol that replaces http. HTTPS is a data transfer protocol on the Internet in the network protocol stack. It is the fourth level protocol (a total of 7 types).

 

IPFS hopes to change this protocol from https:// to IPFS://. This has changed a lot, because with IPFS, when we search for information online, we no longer ask for information from a group of servers in Iceland, and we don’t know who knows the ownership of big companies, but on the basis of reciprocity. The spirit of the system asks people next to us to stare at information.

 

Suppose I want to retrieve information written on paper, before I put it on the Internet (on IPFS), a person is tearing up the paper and distributing part of the paper to nearby people (companions). After this is done, he will bring a header and write to us explaining how to reclaim the debris.

This is the concept behind torrent, namely how to use Emule to download content. In this way, even if I don’t know them, I can retrieve its website from people nearby.

 

Nowadays, due to the high cost of the Internet, the inability to preserve human history, the inability to concentrate opportunities and the excessive reliance on GAFA infrastructure (Google, Amazon, Facebook, Microsoft), the network is inefficient and expensive.

 

IPFS solves it in the following ways:

  • File search
  • Selective storage
  • Duplicate delete
  • Encrypted hash (as in Bitcoin transactions: files are safe)
  • Decentralized naming system.

Today, when we write http://google.com, we ask the server to tell us what the IP address http://google.com has, even if IPFS invented it (there are also systems for converting words into numbers). Go through the following steps: file, hash, IP address.

I hope it can be separated from the Internet, but I don’t know if the pressure and resistance will be so small. In any case, in a world where there is no Internet but still in contact, my connection with IPFS is due to the fact that a few years ago, protests were born in Hong Kong in a very violent way because the Chinese government could not prevent people from exchanging information. (Although the Internet has been shut down).

 

 

They used an application called FileChat: pear to achieve instant messaging. This application uses all possible sensors on the phone (Wi-FI, Bluetooth, infrared) to send files from one person to another as far as possible, and the other person does the same thing. So the information is not that they pass through the server, but from side to side.

 

Nowadays, information is passed through a thousand different people, and at the same time, my data is no longer safe. In this way, in fact, no one owns it, because the people passing through my data don’t know it. It is encrypted.

Everyone is not a first name and surname, but a pseudonym, a nickname. Information is transmitted through all sensors. This is the first sensor with Internet, and it can also be transmitted to another place.

 

The Filecoin blockchain (a project born from IPFS) cannot work exactly like Bitcoin. It has a hybrid system between proof of state and proof of work. They have a series of algorithms that allow you to manage your workload instead of making it costly.

At present, they are all based on the guesswork of the paper: when the blockchain is active (maybe around January to February 2020), we will be able to know whether it will work. I want to show you this system so that you can better understand some concepts.

 

I am here to install one thing on your PC: IPFS is now available. It is ridiculous to type in the complete IPFS address, because the string is very long, but the address can be passed.

 

These slides are on the blockchain with a link at the end, and you can only access it if you have Chrome with an IPFS extension: by searching for IPFS Companion and installing the extension, you must then configure the extension with the internal IPFS node name.

 

DNS is also decentralized: it is a system that asks more people close to the list. It’s a bit like a fellow of the Bitcoin blockchain having to ask others, this is the last block it has reached. Everyone has their own list, but it must be updated at all times. Even without the Internet, the blockchain concept can work, and we must always keep this in mind.

 

The Wikipedia about IPFS is different from what we see without logging into IPFS. Wikipedia is one of the first projects to introduce IPFS through distributed Wikipedia.

 

Irreplaceable tokens: collectibles

 

Bitcoin purists don’t like this topic, because for them, only the Bitcoin scripting language can create assets. But I am a person with a broader perspective, and when I happen to give this kind of speech, I try to show all the content that blockchain can provide, even outside the box.

 

One of the largest blockchains, Ethereum, aims to create a global operating system and has developed a series of standards since 2015 to support applications on the blockchain. They have smart contracts instead of normal functions Code.

The latter is code that is automatically executed by checking conditions that occur on the Web. A set of smart contracts can create a DApp (decentralized application).

 

 

Decentralized applications are usually based on tokens

Decentralized applications are usually based on tokens, which can be coins (exchange commodities): tokens are digital references to data in the system.

On the other hand, an irreplaceable token is a unique token that differs from other tokens based on changing characteristics.

 

Ordinary tokens are said to be fungible; Bitcoin will always be one, so I can trade independently. Tokens are only a difference in quantity, not a difference in quality.

On the other hand, irreplaceable tokens depend on quality, although the main characteristics always remain the same. Therefore, the value will change.

Tokens are for…kitten!

 

Dapper Labs, a company that decided to make Ethereum more functional through experiments, created Dap in exchange for collectible kittens.

 

Whenever someone enters a decentralized application, he will sign the access permission on the CriptoKitties website to confirm his identity, as if it were a digital signature (you must also have an add-on like Metamask to manage the Ethereum address list and Funds. It seems to be a wallet).

 

I have 13 kittens. When I first talked about this topic two years ago, they laughed at me. When I talked about it for the third time, they sold a kitten for $340, and they all remained silent. They know that there is a market behind it.

 

The phenotype and genotype of each kitten are written in the blockchain. We know that all kittens have certain characteristics (eyes, ears, colors…), but they are different and new ones are being created.

This must be done when cats. Even though the names are randomly created, I did not give them, they are created by the blockchain: they are irreplaceable tokens.

 

I bought the first kitten for about $10, then I paired them, and so on… These are unique coins, which can be exchanged inside the app or outside of my wallet the value of.

 

Imagine doing this not with kittens, but with: houses, personal computers…I can move them by moving only his digital identity, thus changing my mind. Today, when we went to Subito.it, we had a manual communication. There are some special kittens, although they are all unique.

 

The registry office is an ideal example of creating a new kitten. Dapper Labs has also done other experiments, such as auction games between magicians. Every irreplaceable token is not just a token, because it creates a characteristic.

The total supply and the criteria for issuing new tokens must be defined in advance. There is a function that allows you to check and manage the balance, the number of tokens on each address, and then there are various functions to manage transfers with a single address.

 

The cost of mating kittens is high, but the commission is very small and very small. Heredity is something that is not specified unless it is born from two kittens that have already mate.

Tokens must comply with a standard called ERC-721, which inherits the standards 20, 23, and 165 developed by Ethereum since 2015.

 

If you want an irreplaceable token that does nothing but is still a token, you can do so. I have a JaackCoin on the Waves blockchain every 10 minutes. By purchasing them, you have time. If everyone has a token, then our value will be determined by the laws of the market.

 

What is a fungible token? What is an irreplaceable token?

In the early days of blockchain networks, alternative tokens were dominant. However, instinctive replacement tokens (NFTs) are a more diverse asset class, and their use cases have a greater impact than native blockchain tokens or other fungible tokens.

NFT

Non-fungible tokens are digital representations of rare assets. NFT is unique in nature and has different attributes that can be distinguished from each other.

 

What is CryptoKitties 2017?

CryptoKitties 2017 is an example of NFT use case. This is a game on the Ethereum blockchain.

Players can collect and breed digital cats paid in ETH, and the digital “genetic material” of each cat is stored on the Ethereum blockchain.

Providing and managing digital, unique and therefore scarce assets (such as collectibles) is nothing new, but before the advent of blockchain and other distributed ledgers, the management cost of this scarcity was high.

It relies on the verification and security of the centralized issuing entity.

On the other hand, distributed ledgers enable a decentralized, publicly verifiable foundation to issue and manage these assets with very low operating costs.

 

Irreplaceable tokens can be used in decentralized applications, such as encrypted collectibles or encrypted games.

They can also represent any type of certificates (driving licenses, degrees and other educational certificates), as well as keys, passes, identities, wills, voting rights, tickets and any type of access rights, membership plans, copyrights, supply chain tracking, medical data,cCommodity license, warranty, etc.

Irreplaceable tokens can also tokenize all types of assets (whether digital assets or physical assets).

They allow unique investments related to physical objects, such as unique artworks, real estate or any other real-world assets and securities.

They also allow partial ownership of goods that are not easily divided, such as real estate, artwork or other souvenirs.

Tokenized tangible assets can provide investors with more liquidity.

A person can tokenize a building, some of which can grant simple ownership of part of the real estate, while other tokens can grant special permissions, such as access rights.

Irreplaceable tokens can also discover their potential uses in digital art by helping to prove source, authenticity and ownership.

 

How old is the idea of irreplaceable crypto tokens?

The concept of irreplaceable crypto tokens is not new.

In 2013, non-ferrous coins were one of the first projects to try to bind unique attributes to digital assets.

The idea is to use Bitcoin tokens to represent real-world assets such as stocks, bonds, commodities, or housing contracts. Counterparty is another project based on this idea, but it’s a step further.

Non Fungible Tokesn Info-graphics

It enables users to create their own virtual assets on top of the Bitcoin blockchain.

When Ethereum came along, both of these projects had difficulty gaining widespread adoption, allowing simpler token issuance and sales with a few lines of code. This stimulated token sales as a new fundraising tool.

 

What is ERC-721?

Compared to ERC-20, which only covers some asset attributes (such as name, symbol, total supply, and balance), ERC-721 allows more detailed attributes to make the asset special, beyond the name, balance, total supply, and symbol. It allows to include metadata about assets and information about ownership.

After verification, such additional information can add value to ensure the source of the asset.

In the case of art and collectibles, the ability to track the origin of assets can be very valuable, and this is also true in the supply chain of other goods and services.

The success of ERC-721 may also trigger other blockchain projects, such as the NEO blockchain, to start developing their own standards for irreplaceable tokens.

 

What is the hot NFT recently and should we participate?

The latest craze in the crypto space is changing the way we buy and sell goods in the digital space.

 

Some blind boxes of cartoon cats, a video of LeBron dunking at high altitude, and a digital painting with a resolution of only 5000 pixels will soon be sold at Christie’s auction house.

 

All of these are irreplaceable tokens, or NFTs. This is an emerging digital artwork and method used in other media products.

 

These encrypted assets represent the latest area based on the blockchain boom: the entire NFT market was valued at no more than 42 million US dollars three years ago. According to the latest estimates by Nonfungible.com, which monitors the NFT market, the market value of NFTs has increased by 705% by the end of 2020, reaching $338 million.

NFT tokens

Although there is no estimate of the current market size, there must be greater growth. As of the end of February this year, NFT’s sales were close to 310 million U.S. dollars, almost five times the full-year sales in 2020.

 

“This is the currency of the future world,” actor William Shatner said in a video interview at his home in San Fernando Valley.

 

In July last year, the 89-year-old Shatner sold NFTs about the souvenirs of his life and career on the Wax blockchain. Divided into a five-photo NFT containing five dollars and a 25-photo NFT containing 25 dollars, there are stills of him in “Star Trek” and even his 68-year-old dental X-ray.

 

The NFT was sold out nine minutes after its release. One of the rarest images of Shatner’s avatar in the early 21st century was finally resold for $6,800. “This is a phenomenon that rare things on the Internet are being exaggerated.”

 

What is NFT block?

Simply put, NFT is a block on the blockchain. This decentralized digital ledger technology is the foundation of cryptocurrencies such as Bitcoin. Unlike most cryptocurrencies, Bitcoin is interchangeable, which means that one Bitcoin and another Bitcoin are essentially indistinguishable and have the same value.

 

But NFTs are irreplaceable. This feature means that they are unique and can represent a unique thing, such as the rare William Shatner’s avatar, or even the ownership of real estate.

 

Because they are unique and stored on the blockchain, they are undoubtedly real. This feature is especially important for what they represent as digital assets. Since digital files can be copied infinitely and perfectly, it is difficult to own (or sell) a rare digital photo of Captain Kirk. The NTF token solves this problem by proving that a digital file is a unique “original file”.

 

When purchasing NFT, you not only obtain an immutable ownership record of assets, but also gain access to actual assets, which can be anything.

 

At present, most of them are digital artworks or transaction vouchers. Some are virtual goods that only exist in the market, and some are packaged in familiar formats such as JPEG or PDF. A few NFTs are digital records of the ownership of actual physical objects.

 

When did the NFT start to be issued?

Around 2017. The two earliest popular early NFTs were CryptoPunks and CryptoKitty. CryptoPunks contains 10,000 cute animations of human bodies and animal characters, and CryptoKitty is a set of images of fantasy cats, which were originally given away for free. However, the most valuable CryptoKitty is now worth more than $100,000, and CryptoPunks is worth more than $1 million.

 

 

“I wish I could tell you that we know how everything will develop,” said Mack Flavelle, one of the co-founders of CryptoKitties, “but we were as surprised as everyone else.”

 

CryptoKitties was launched in 2017, triggering a crazy NFT collection craze. Today, more than 260 characters trade weekly, with annual sales exceeding $2 million.

 

What is special about the NFT token?

For the buyer, NFT provides a secure ownership certificate for digital items to protect the value of the goods. The Internet makes it easy to copy and forge certain things.

If there is no such indisputable ownership record as NFT, then digital goods are basically worthless.

 

For sellers, NFT not only makes today’s sales possible, but also allows them to obtain permanent benefits. Especially in history, it is difficult for artists to get rewards for their works. NFTS can be coded to allow the original creator to earn a profit for each token transaction, usually between 2.5% and 10% of the sale price.

 

NFT attracts celebrities who want to expand their prestige income potential. For example, the star Logan Pau on Youtube sold an NFT worth $5 million last weekend, and he was portrayed as a cartoon character of a Pokémon coach.

 

London artist Benjamin Gentilli said: “NFT is the largest adjustment to the rights of artworks since the Renaissance and the printing industry, bringing it back to the hands of artists.” Four months ago, Benjamin Gentilli was close to the auction house at Christie’s. NFT was sold at a price of $131,250, which was ten times the estimated price.

 

“It attracts those who have established their own audience groups, perhaps on social media, and sell their works to the audience.” Benjamin Gentilli said.

Beeple’s collages will be sold at Christie’s auction; the artist has worked with brands such as Nike and Louis Vuitton.

 

Why is there NFT in the news now?

Multiple factors contributed to this event. Mainstream celebrities like Paul caught this trend and pushed NFT into the spotlight. Christie’s auction house is doing the same thing. This respected auction house gives the auction item a kind of legitimacy.

 

Next week, Christie’s auction house will complete a 14-day online sale of works by digital artist Beeple. The first shot was a virtual collage of life photos taken by Beeple for more than 5,000 consecutive days. The starting price was US$100 and it has exceeded US$1 million.

 

Another major player driving the NFT boom is NBA Top Shot, a video-based virtual basketball trading card website launched in October last year. These so-called “instants” are packaged and sold in five trading cards and then resold in a thriving secondary market.

These collections were later displayed in publicly viewable profile pages, which were used as virtual loot boxes.

 

NBA Top Shot has generated sales worth $200 million, and more than two-thirds of the transactions were conducted in the past week.

Non fungible token

 

On Monday, 31-year-old Jesse Schwarz, located in Los Angeles, bought LeBron’s exciting moment in the 2019 Western Conference Finals, setting a record high. This time the hang gliding one-handed dunk was finally sold for $208,000.

 

“At first people would say,’You just spent $200,000, are you crazy? Are you lost?'” Schwarz recalled. He thinks he can now sell this moment for $1 million or more. “People’s trust in the blockchain has gradually entered the mainstream. This product will not scare people away…everyone will eventually get on board,” he said with a shrug.

 

Should you buy an NFT?

Whether it’s artwork, Mouton Rothschild or CryptoKitty in 1982, investing in alternative markets is more risky and less rewarding than investing in more mainstream markets such as stocks.

 

A recent Citibank study found that from 1985 to 2018, the annualized rate of return in the contemporary art market was only 7.5%. At the same time, the return rate of the stock market is close to 10%. Although the price of NFT is currently soaring, there is a bubble.

 

The NFT market is largely speculative, and it is likely to experience the dramatic price fluctuations experienced by cryptocurrencies in the past few years. For example, the price of Bitcoin today is about $50,000. Twelve months ago, it was worth less than one-fifth.

 

“The risks are high,” said Nadya Ivanova, a researcher at NFTS in L’Atelier, a subsidiary of the investment bank BNP Paribas. “The important thing to understand about the NFT market is that it is very new. The market is still going through different market cycles that determine the true value of things.”

 

The original text comes from Forbes, compiled by Blockchain Knight, English copyright belongs to the original author, please contact the compiler for Chinese reprint

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