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NFTs, Crypto, & Blockchain in Plain English + How Businesses Can Use Them Now - [Updated 2022]

This is a video I did last year but I'm working on updating it this year. You can view it but I would recommend reading the text below as it's the most updated explanation I have, to date!


 

Most Updated Explanation I Have, To Date:


Recently answered a question explaining NFTs in r/AskReddit, figured that it might be useful to some of you here. Added in a section on the bottom, "Why This Matters to Business Owners"

Explaining it in plain english:

Imagine that I own a house and you want to buy my house. In order to do this, we'll have multiple steps in the process:

1. You will ask me to prove that I own the house

I will give you my "deed", a physical paper, which proves that I own the house. However, you might doubt that my paper is real (what if it's forged?). So, we'll say let's go ask the government.

2. A government agency will validate that my Deed is legitimate

The government office says, "yes, we checked the records and this deed is real, Chirag does own this house"

At this point, we have proven that I own the house. But...

3. I need you to prove that you have the money to pay me!

So, you'll go to the bank and either have them give you an official document that proves you're approved for a loan or you'll ask them for a banker's check.

Now, you know I own the house & I know you have the money...

4. We make a contract

In the contract, it says that on December 1, you will give me the money and I will give you the house.

5. On December 1: I get the check & you get a deed which now says that you are the official owner of the house

Plus, the government will update their files to make sure there's a clear record that the house is now yours.

 

Now let's translate this to NFTs, Crypto, & Blockchain

  • The Deed that proves who owns the house = The NFT

  • The money you paid me = Cryptocurrency

  • The government files that store all this information = The Blockchain

This is very simplified but it should give you a starting point to hold a conversation and explore this field.

 

Important Note About NFTs

At the moment, many people are being taken advantage of, due to their lack of access to knowledge about this field.

If I buy a limited edition watch, the seller will most likely give me three pieces of paper:

  1. A Receipt - To prove I bought the watch

  2. A Certifical of Ownership - To prove I am the rightful owner

  3. A Certificate of Authenticity - So that I can prove to others that the watch is real

However, pieces of paper are problematic because they can be stolen, lost, or forged.

Most realistic application of NFTs in the future: Instead of giving me those 3 pieces of paper, they'll instead give me an NFT (essentially a digital version which combines all three documents). The NFT is like a digital certificate which proves you own something and that it's authentic.

Simple terms, NFT technology (theoretically) makes it impossible for you to lose, forge, or steel an NFT. Thus solving the issue we have with current paper & digital receipts.