A few days ago someone allegedly paid $1.3 million for a rock. It’s not even a real rock, or a picture of a real rock. And the underlying rock contract doesn’t even follow the NFT standard, as that was established in 2018, after this contract was deployed.
But it’s not about the rock, and we’re now in some crazy bubble with lots of internal transactions to make it look like someone paid this much for something. If I’ve got $1.3 millions worth of ETH, and I sell this rock to myself, you know..
Instead, what this is about, is the establishment of a new way of describing contracts. Do you legally own something if you’re the rightful owner of an NFT? I think we’ve established that if you own fungible tokens, you’re the rightful owner of this. And if these fungible tokens are stablecoins, we can have a more reasonable discussion around their underlying value too.
So then, what if an NFT was tied to a real rock. While I’m no rock expert, and one rock look much the same as another similar rock to me, I can understand that rocks could be non-fungible. So if the underlying asset was a real rock, and I wanted to transfer ownership of this real rock to you, why couldn’t I do this using an NFT?
It would be similar to me signing a contract with you, transferring ownership to you with a signature on paper. But paper is old school, slow and illiquid. If instead it was an NFT on Ethereum, I could maybe wrap NFTs in a stablecoin, and enable fractional ownership. With that I could easily borrow against the rock as collateral, and off we go.
That’s what this is about, a new way of doing something we’ve been doing forever, but with added benefits, such as programmable money.