FirstRoot is evolving from a platform that teaches financial literacy and civic engagement through Participatory Budgeting in schools into a much bigger platform that includes a fundraising component based on NFTs.
This is the first of several newsletters in which I will be sharing our evolution, starting with what an NFT is and how they are and will be used in the future.
And expect a HUGE announcement at our 2nd annual conference, May 6th/7th, in Washington, D.C.
So, what’s an NFT?
While a lot of websites have very good descriptions of NFTs, I wanted to share a perspective that is grounded on a familiar process with known solutions.
Let’s start with an example of something that isn’t an NFT: a notarized document.
Let’s say you’re want to give a limited power of attorney to another person. After you’ve prepared your documents, you’d take them to a notary. The notary verifies your identify, certifies that you’ve signed the document, and creates a record of that transaction.
Every time I have used a notary they have also made the document I’ve signed unique, doing such things as imprinting it with a stamp, signing their own name to the document, or otherwise physically altering the original document in which a way that it can be generally proven to be unique. in the process, notarization is an official fraud-deterrent process that assures the parties of a transaction that a document is authentic, and can be trusted.
Most of the time the notary also makes a record of the ‘creation transaction’ in a separate book, often taking your fingerprint, as a proof of the transaction that is a direct reference to the original document. Subsequent transactions associated with the asset are also stored, albeit often in other systems, which increases the complexity of knowing the full history of the asset (it is possible, and often involves thousands of dollars of forensic legal fees – common in mergers and acquisitions or probate).
Even if you make 1,000 or even 1,000,000 copies of the document, you could still prove that they were copies. The original is truly unique. (Yeah, I know forgeries can be really good – there is an entire industry associated with asserting authenticity of documents).
Now… imagine that you could perform a similar function without a notary. And for a digital asset, like a PDF or a picture of your power of attorney. And in a way that eliminated, for all practical purposes, the need to hire others to prove the authenticity of documents.
That’s an NFT.
An NFT is a provably unique, one-of-a-kind digital asset. The asset is typically stored outside of the blockchain and the ‘proof of the uniqueness or proof of a transaction’ (the fingerprint in the notary ledger) is typically stored in a blockchain. All activity associated with that asset, from its original creation to any transference of ownership, is tracked with perfect accuracy through the blockchain – which dramatically lowers ‘forensic legal research costs’.
That “asset” could be a power of attorney, a deed to a house, a copy of your tax return, a receipt from a purchase at a store, a marriage certificate, a birth certificate, a will, a driver’s license, or a certificate of completion.
That “asset” can be a creative work, such as a picture, a song, or a video.
I started my description of NFTs with something other than art because I firmly believe that NFTs will emerge as one of the most foundational technologies of the future. I envision every single kind of document or asset that is unique and/or owner will be completely replaced by or coupled with an NFT.
Want to talk to me about this even more? Meet me at our conference!
And I’ll post more about NFTs this week.