I’ve decided to start a newsletter because that’s what all the cool kids seem to be doing these days, so without further ado…
Welcome to the Hello World version of my newsletter!
“Hello World” is a reference in software engineering that is used to describe the early stages of building a new app, piece of software, or even a simple feature. The first code you write for a project is to get it to display Hello World.
Writing is hard, good writing is harder. I’m hesitant to send this but I’ve been mulling it around for too long. My intention with these posts is to build, invest, and think in public. If you read something you like, let me know!
Heard it here first
Have you heard of NFTs? “Non-fungible tokens”. We should all care about NFTs because they will fundamentally change the way we buy and sell physical or digital assets.
Many know “token” from the crypto world, and “non-fungible” means “not easy to exchange or mix with other similar goods or assets“, so what happens when you combine these two? You get an NFT, which allows the buyer and seller to authenticate their transaction on the public ledger, and claim “clean” ownership over the title of the asset. I’m still learning but as far as I know, there are two types of NFTs we care about:
- Digital representation of a physical asset, like artwork or real estate.
- Digital collectible, or moment, which is a digital asset, usually as an audiovisual clip or piece of artwork ($69M). It’s official and it’s authenticated. For example, I own this Jaylen Brown dunk for $13.
Let’s focus on #1 for now, the easier use case for most folks to grok.
Why should we care about NFTs of physical assets? Because it is provenance, authentication & ownership, fractionalization, and low transaction costs all wrapped up into one. Breaking this down:
- Provenance is the history of ownership of a valued object or work of art or literature. Since NFT transaction history sits on the blockchain, the history of how it exchanged hands can be made public and tracked. (Made You Look documentary)
- Authentication & ownership. Whether it’s a small asset, like a used car on craigslist, or large, like an investment property, disputes over title are too common. NFTs would generally eliminate many of those issues. And with a layer of authentication baked into NFTs for free, the buyer is guaranteed to be negotiating with the rightful owner of the asset.
- Fractionalization & low transaction costs. NFTs also allow us to break up ownership of the asset into fractions at a significantly lower cost than ever before. Who wants to own a Mickey Mantle card?
More reading here but in a nutshell, NFTs will give buyers and sellers much more peace of mind to do business.
Thanks for reading this far; reply with thoughts or wait for another letter soon!
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