What makes NFTs different from just saving and owning a JPEG file?
Just a few months ago, headlines broke that an NFT made by a digital artist known as Beeple, sold for a whopping 69 million US dollars. We’ve heard even more ridiculous stories such as a cartoon image of a rock being sold as high as 1.3 million USD.
It begs the question: why don’t we just right click and save JPEG copies of these images?
Harry Santos has had a decade of digital marketing experience working for major global brands and FMCGs and is currently working for a local fintech startup. He’s been a big advocate of cryptocurrencies and got into the space back in 2013.
Could NFTs be used for real-world collectibles?
Let’s start with something more tangible— real-world collectibles, like sneakers.
In 2019, Nike patented a blockchain-based way to “attach cryptographically secured digital assets to a physical product”. We all know there are fake Nike sneakers out there you can buy that are cheaper but could possibly have the exact same look or even quality. With this patent, each unique and authentic pair of Nike sneakers could be paired to something similar to an NFT. Buyers can store this in their smartphones, transfer it to someone else if they decide to sell in a secondary market, and essentially becomes proof this pair is guaranteed authentic.
Now, in this use case, you obviously can’t just save a JPEG copy. Each issued “NFT” (if that’s what Nike will call it) will have a cryptographically unique signature tied to just one pair of sneakers. It will have a unique code or “address” and this could be validated by anyone in an online public ledger (essentially what a blockchain is).
Could NFTs be used to limit bureaucracy and corruption in government?
Sure, any document issued by a government agency could easily just be NFTs and this would reduce the burden of red tapes and costs passed on to taxpayers.
Let’s take car ownership registrations as an example. At least here in the Philippines (where I’m from), most people don’t bother with “officially” transferring ownership and just both give consent documented in a deed of sale. There are times when people don’t even bother with doing that. This is because transferring ownership in the car registration through the government is a cumbersome and costly process. NFTs could simplify all that to a few clicks.
Now, think of other government-issued documents or IDs: land titles, birth certificates, passports, gun licenses, police badges, etc. If done in a decentralized manner, not only will storage, confidentiality, and transfer of these documents be less tedious and costly for taxpayers, it would also abolish the need for many bureaucracies and the opportunity for corruption.
More importantly, we don’t have to trust that the documents are authentic — we can verify.
Of course, the real barrier here is, why would the government approve of something that would limit or abolish their power? Nonetheless, this use case for government helps prove my case.
NFTs are more than just JPEGs
Without having to get into the technical aspects of NFTs, I hope showing those potential use cases clarify why you can’t just save a JPEG of an NFT. It’s like burning a copied CD of your favorite artist’s album. It’s like asking, “why can’t I just print my own Pokemon/NBA cards?” — it’s just not the same.
Sure, it feels like that right now. And yes, the market for NFTs seem to be crazy and 100% highly speculative and risky — but we’re just at the beginning. Art and collectibles is just the tip of the iceberg. The real killer apps are still being built or discovered and we are witnessing the onset of a technological revolution.
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This article is published on BitPinas: Why can’t I just save a JPEG of an NFT?