May 2021 // The Wedding Edition

Understanding Non-Fungible Tokens for Photographers | Scott Detweiler

In my own experience, I sold an animated version of one of my Doll series within 24 hours of it being minted in early April on foundation.io. It ended up selling for around 1.210 Ethereum (about $400). What is an Ethereum? Well, that is where this entire thing takes a bit of an exciting turn. Ethereum is a digital currency like Bitcoin, and its value can vary wildly by the hour. So why use digital currency? Even though this is a bit convoluted, I want to explain precisely how this works because a digital currency is at the heart of this entire process. To start, let’s take a super-duper simplified look at what we will be calling the “blockchain.” Think of the blockchain as a general ledger of transactions and contracts. So, grab your beverage of choice—better yet, grab two—and relax your mind as we are about to learn some kung fu. For example, imagine a child’s wooden toy block. On one face, we put our fancy original image. On another face of the block, we put our unique digital signature as the current owner (commonly referred to as a wallet signature). On the third face, we put the wallet address of the person buying the image and the exact amount they paid for it, in Ethereum. Now, this might seem like enough information, but it leaves the door wide open for people to invent transactions out of thin air because anyone could say they own your image or that you owe them a million Ethereum. To resolve this, we need to include on the block the answer to a complicated mathematical problem using the above information as the variables in the problem. This answer is known as a proof-of-work, or “hash.” Suppose we change one tiny bit of the information like a transaction amount or digital wallet signature. In that case, the math problem no longer gives a rational and verifiable answer. Furthermore, to be sure people can’t invent blocks, we always encrypt them in a specific order as a chain of transactions. We even include the hash of the previous transaction (no matter whose block it was) on yet another face of the block before we encrypt it. So, the hash of the last block is included on our block, and if some smartypants tries to sneak in a block out of order, change the wallets, alter the image, swap blocks, etc., the math will not work, and the blockchain will reject it. We then make that hash available for the following block to use when they do their encryption, and so on down the chain. This method leaves no room for hacking or falsifying information since any alteration makes the hash change violently. So, who does all of this tracking of transactions and creating all these “proof-of-work hash answer things”? The answer is: folks commonly referred to as “miners.”

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