Demystifying NFT (Part 1 of a Multi-Parts Series): "Decentralization"
Over the last couple of months, a number of friends have asked "what is NFT really"? I thought I would write up a few articles, and hopefully can explain the subject better. (Well, at least I try not to make it even more confusing.)
The above is an NFT art from Articoin
And, my approach is based more on an engineering perspective.
Concept one: NFT is based on something that has no central authority.
What do I mean by that? Well, let's say you buy a new home. The paperwork (contacts) will then be submitted to the government. You would pay stamp duty to the government. After you finish your payment obligations, the home is yours. And, if there is any dispute between you and the original homeowner, you can technically ask the Court to resolve the dispute.
So, in this case, the government is the central authority.
But, NFT is based on the concept of having no central authority. In fact, it is based on something similar to a voting system. If enough people in the community say something is true, then it must be true.
Well, not exactly comforting, isn't it? Remember once upon a time, most people said that the world is flat. or that the Sun revolves around Earth, and not the other way around.
So, how would some people know that something is true without a central authority?
Let's play a game first in this series. (Credit: https://www.theguardian.com/science/2021/mar/22/did-you-solve-it-the-crazy-maths-of-crypto)
Imagine this: A group of friends, say 10 of you, gets together. Well, like it, or not, someone knows something about somebody. Yes, gossip time! You and your friend want to talk about one of the people in the group. So, it has to be one of the other 8 people you want to "yap yap yap" away.
The problem is that you don't want to start gossiping unless you know that your friend also wants to talk about that person. Sounds like a real-life situation?
Well, in real life, you may assign a code name or make a vague description of the subject. Hoping that as the conversation goes on, you and your communication partner both recognize that you are talking about the same person. And, wala, you can gossip for the next fourteen hours....
But, what if you don't have the time to "probe". You need to know right away whether you can share a gossip/secret with a party?
Let me repeat that problem statement. You can only freely talk about a 3rd person if you know for a fact that the person you are talking to also has the same 3rd person in mind.
Now, what can you do?
Option 1: Confess to a trusted party first
Say, you and the person you are talking to both talk to a trusted lawyer who vouches to keep your confession confidential.
Then the trusted lawyer can inform you whether you and your friend are talking about the same 3rd person.
Well, that means you have to trust some authority.
Option 2: Restaurant Booking Trick
You make a booking a restaurant at Restaurant A using your 3rd person name. Your friend makes a booking at Restaurant B using his 3rd person name.
Then the next day, you call Restaurant B asking to confirm the booking. Your friend does the same at Restaurant A. Now, in the simplest sense. Both you and your friend can confirm whether the 3rd person is the same for both of you. Neat!
Pretty good. But, how do you know that the restaurants do not make a mistake?
Option 3: Magic Cups
Say, 8 cups are provided. Each cup has a magic mark that will go invisible in 10 minutes. With the magic mark, each cup has the name of one of the 8 other group members. So, you and your friend take turns to put a piece of paper in the name of the 3rd person whom you want to talk about.
You both come back in 10 minutes. (yes, it is tamper-proof because in the room there are just the 2 of you). Then you both flip the cups. If there are 2 pieces of paper in any of the cups, you know both of you are talking about the same person. If not, no harm no foul. Neither of you knows whom you really want to talk about. But then you know that you are talking about a different person --- and you can proceed with the rest of the evening civilly and just watch a nice movie.
In this Option, there is no central authority, unless you count the creator of that 8 cups which you need to trust. But, this is better already than the 2 other options. No central authority and no leakage of information other than the ones you already know.
It is a lot to digest. And, we will leave it like that for now. What you have just seen is an important concept.
Later we will use this concept to build up our understanding of the whole picture of NFT.