Here is an attempt to define what is an NFT.
Arabs have a saying about everything coming and going but the pyramids being there forever, defying time. The blockchains are the pyramids of our time. The internet was built to survive nuclear war by using stateless protocols that enable the network to survive even with many of its nodes being down. Blockchain is a step further… humanity’s attempt to create a verifiable state (of information)… such that will survive even the internet being down. For it only relies on the internet for convenience, but does not depend on it for consensus.
NFTs live on blockchains, thus they are graffiti on the pyramids, scratches and scars on something that was designed to live forever.
In the most abstract terms, they are just messages from the originator to the world, inheriting all the qualities of digital signatures (authentication, integrity and non-repudiation) plus the unique innovation of the blockchain (prevention of double-spend via a shared ledger).
Such messages are a very strong foundation for property transfer, and indeed that is why blockchain was invented in the first place, for Bitcoin transfers are just random messages, carved into the everlasting blocks of Pyramids of Time, which we choose to interpret as reassigning ownership of Bitcoin. Such is the power of those messages… that people are willing to pay real-world cash to receive a message saying that they now own a part of an imaginary thing… that does not exist anywhere except in the messages talking about it.
Strong Messages indeed. The price of Bitcoin is the current consensus price for being mentioned as owner of a worthless thing on the Forever Ledger, the most durable store of records ever to exist.
Soon after it was understood that, while writing on the Time Pyramids might be hard and expensive, they are also indestructible, all sorts of conventions sprung up about how to word messages for a particular purpose and how to interpret them. NFTs are messages that say:
“To the last recipient of this message, the following belongs: ________”
Anything can be on the dashed line. An image. An amount of currency. A car. A house. Technology cannot enforce how a message will be interpreted, nor whether it will be honored. That is up to humans. But it can, and does, enforce that the message itself cannot be forged and that only the last recipient can send it onward.
Thus the definition of NFTs is simple. They are conventions about messages, carved into time itself, that are meant to let them behave like pointers to bearer assets (assets that can be transferred onward by their last recipient, which we dub the owner).
Clearly it is all imaginary and a matter of convention. Yet the durability of the messaging medium gives the property records on it a certain quality that other property registers will never be able to match. Human life is short and he is a feeble creature that changes opinions and beliefs as winds blow. But what is written on blockchain will remain written — and it will anchor and shape our future.
