# Do you truly understand NFTs ? By [Kanji](https://paragraph.com/@kanjiworld) · 2022-07-14 --- ### Definition NFTs brought back into fashion an old law concept: **fungibility**. Put simply, goods have only **two modes of being**: they are **mutually** **interchangeable** - or they aren't. In a supermarket, the front pack of rice has exactly the same value as the one in the stock - they're **undifferentiated.** Same for coins: you could exchange the 1$ note in your pocket for mine, it wouldn't matter. Yet, you wouldn't accept, as easily, the offer from someone asking to swap his condo for yours. Since each one is **unique**, you must consider each apartment **individually** to estimate its value. **Uniqueness** is what characterizes **non-fungible** assets and what prevents them to be considered as a whole. Non-fungible assets are **pretty common** in our everyday life: Art, Real Estate etc. Even a human is non-fungible since you can't replace one with another. It's very interesting that such an **ordinariness** became that viral. Indeed, NFTs are only a **non-physical** version of non-fungibles assets. It seems pretty unremarkable, isn't it? So did we lose our minds to be hyped so much? **Not really.** **Until now, virtual "non-fungible" assets were not readily achievable.** Before the blockchain era, virtual worlds were **too** **closed** (video games, social media) or **too** **open** (P2P file-sharing protocols like Limewire). Thereby, virtual objects did not fully transcribe the real-world experience of **private** **property** and **scarcity.** Indeed, for example, you don't **buy** items in usual video games; you **only** **rent the right to use** them since your access to them is restricted, and you can't resell them easily. (**No** **property**) And objects lose their **scarcity** in free download platforms since they allow the creation and spreading of an unlimited number copy of any files without any **traceability**. The Internet, as we know it, was not designed for **creators to profit from their creations**. Artists are exploited and underpaid on **centralized** **platforms**, leaked and disrespected on **P2P** **applications**. They are an excellent way to be **recognized** but not earn a **living**. The internet, as we know it, inherits old WEB1/WEB2 patterns. ### Here's a bit of history. From an end-user perspective, **WEB1** was all about **reading information**. Except for coders, it was not possible to create online content. Few people were publishing on the Internet and a lot were consuming or buying their creations - E-commerce like the old Amazon were the epitome of web1. **WEB2** represents the paradigm shift in how the Internet is used: Early 00s, thanks to **mobile internet access** and **the rise of social media**, lots of people were now able to create and interact through online content, **effortlessly**. Wikipedia, WordPress, Facebook, and Uber represent all the shades of this new Internet era where you could write on a blog, create your own website, publish creative content, interact with other people and even propose your services, to a worldwide audience and without any programming skills. Those big companies solved the programming friction and established themselves as the foundations of the new age of the Internet. Indeed, Web2 applications were a **scalable way** to achieve internet mass adoption, but they neglect elements that appear essential for long-term development. Each industry is led by a few powerful actors (**Lack of decentralization**) that are absorbing all of the economic value created by their users (**Lack of fairness**). Twenty years later, we saw that letting them full powers could even be dangerous. Because our **world** is increasingly more **digitalized** and our **identity** has become more and more defined by our **online** **presence**; we should not give the responsibility to create and rule virtual worlds to **revenue**\-**centric** **platforms**. In essence, their objective is misaligned with **users**' **interests**. And because they compete fiercely against each other, the internet is **scattered** into several conflicting parts that prevent **composability**. So the main problem comes from the lack of **harmony** on today's internet, which is built on **private** **databases**. This leads to coordination problems for the developers and the end-users Apps work highly well if you stay within the application that the database was built for. For example, It’s very easy to send money between 2 Cashapp users. But it’s way harder for a Venmo user to send cash to a Revolut Customer. It’s impossible for a Telegram user to send a message to a Whatsapp user. Composability does exist but it’s very limited: you can for example send a tweet using WhatsApp to a WhatsApp user, but the UX/UI is very poor. ### WEB3 This is what a **blockchain** tries to enhance: as a **shared and open database** that acts as a **base layer for the internet, a blockchain frees the web from its rigidity.** For **developers**, it's a dreamed life to build inside a **shared execution environment**, and for the **users**, it is life-changing to jump from one application to another **without** **friction**. Thousands of different applications can instantly talk to one another using **standardized** **calls**. For example, Maker, Aave, and Uniswap work together seamlessly because they're both built on the same **common credibly neutral layer**, Ethereum. That's the power of **Blockchain**. So the main advantages that give blockchain technology are **true** **composability, security based on high-level cryptography, and endless opportunity to build the foundations of a fairer Internet. Everything that was missing to** recreate an unbiased experience of the virtual world. **This is WEB3 and it's a godsend for virtual non-fungible assets.** Indeed, blockchain-based NFTs are **easily** **transferable**, **24/7** **traceable**, **scarce** if wanted and they are **YOURS**. **Art** is the first industry that comes to people's minds when one mentions industries that could be disrupted by NFTs, and it's highly pertinent. Think this world cornered by powerful galleries that sign artists and become the only entity that could legally certify their work: they are an expensive, not efficient, and profit-driven certificate of authenticity. Yet, Artists could put their work on-chain, become their own gallery, and receive royalties on each new sale. A blockchain is an agnostic pitch for them to display and sell their work in a frictionless way. NFTs will also disrupt our way of playing **video games**. One day we'll look back on the pre-blockchain gaming era as the crazy time when players didn't fully own their in-game assets. Indeed, people are spending thousands of dollars on items where the supply is mutable, and they don't really care. It's funny to remember that this is even the reason why Vitalik started to get interested in decentralized systems: World of Warcraft made him realize that "centralized services can bring horrors". NFTs will power the from-rent-to-buy paradigm shift: they are provable ownership of digital assets. ### CONCLUSION Non-fungible objects are not only meant to be collected: they can be **rented**, **shared-but-not-transferred**, and **earned**. We'll write dedicated articles for each of those object's dimensions but we can already assert that **earned** NFT will disrupt this industry by allowing Ethereum addresses to be more like **souls** which unlocks countless opportunities.  As we said earlier, humans themselves are non-fungible. Our digital identity is shaped by our social media profiles: Linkedin for our professional life, Instagram for our "better self", Twitter for our crazy self, etc. All those identities, in addition to being a burden to manage, **don't** **belong** **to** **us**. We are slaves on mainstream social media, but NFTs have the possibility to free us from Web2 social platforms and give us back our sovereign identity: you can read our previous [article](https://www.linkedin.com/pulse/nfts-industries-social-media-kanji/?trackingId=0%2B9f8HyogqiHkQESL2ompA%3D%3D) to understand how. --- *Originally published on [Kanji](https://paragraph.com/@kanjiworld/do-you-truly-understand-nfts)*