Old Skool Webcomic

It Almost Makes Sense

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Comic Transcript

B: If you’re done being clueless about the cost of housing, let’s return to my example. Let’s assume I want to sell my house for 10 bitcoin. The problem is that my house is a physical object, but bitcoin transactions are digital. So I need to find a way to electronically represent my house in order to show that a transaction takes place.

A: How do you do that?

B: With metadata! I can add the house address to the blockchain. Or I could add the property information on file with the county, showing the actual borders. What I’m essentially doing is creating a token on the blockchain that represents the physical house I’m trying to sell.

A: A “non-fungible” token, I assume.

B: That’s right. The NFT represents the house, and the metadata can’t mean anything else. So I can set up a transaction where someone pays 10 bitcoin and receives the NFT representing the house, and voila — I just sold my house.

A: Hey, I actually understood that!

B: I know, right?

A: It’s a great example that clearly illustrates how an NFT might be useful tying physical items to digital commerce.

B: Thank you.

A: So obviously that’s not really what people are using NFTs to do.

B: Oh, absolutely not. What they’re actually doing makes far less sense.

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Drew 8 February 2022 at 10:36 AM

Until that transaction is recorded by the County Registrar, you haven’t just sold anything. Blockchain might actually be a great technology for registrars to adopt, but until they do I think I’ll do my next home purchase the old-fashioned way.

C. B. Wright 8 February 2022 at 10:54 AM

That’s true — you still have to have the official people stamp the official documents with the official stamp. But that’s the same with physical money — if someone showed up at your front door with cash on hand, they’d still need the same Registrar involvement before they could legally claim to own your house. The real estate NFT scenario is a great example of showing how — theoretically — blockchain can be used to represent physical objects in digital transactions.

Mycroft W 9 February 2022 at 10:17 AM

Question: is a fungible token something like a bitcoin? because I can break it up and pay you 0.000357BTC and Kim over there 0.000436 BTC and… and they can combine them into 0.0476 BTC in their wallets like cash?

I know what’s coming…and I understand enough of it to run away screaming…but I am still a bit confused about the what’s not NFT about what we started with thing.

Or should I be asking for actual education on a circle-comic site?

C. B. Wright 9 February 2022 at 10:48 AM

No, bitcoins are “fungible” because like you described above, you can break them up and swap them and exchange them, and if I gave you one bitcoin and you gave me one bitcoin, we’d both still have a bitcoin.

Something “Non-fungible” is supposed to represent a unique and irreplaceable item. So with the house example in this comic, the NFT represents the entire house and the property associated with it, and it doesn’t break apart — so it can’t be used for just the living room, for example.

C. B. Wright 9 February 2022 at 10:48 AM

Whether or not you should be asking for education on a circle-comic site is something I’ll leave to others to decide. 😀


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