The Changelog: Software Development, Open Source - Let's mint some NFTs (Interview)

Episode Date: April 27, 2021

This week we're talking about NFTs — that's right, non-fungible tokens and we're joined by Mikeal Rogers, who's leading all things InterPlanetary Linked Data at Protocol Labs. We go down the NFT rabbit hole on a very technical level and we come out the other side with clarity and a compelling use of NFTs.

This week on The ChangeLog, we're talking about NFTs. That's right, non-fungible tokens. And we're joined by Michael Rogers, who's leading all things interplanetary linked data at Protocol Labs. We go down the NFT rabbit hole on a very technical level, and somehow we come out the other side with clarity and a compelling use of NFTs. Big thanks to our partners, Linode Fastly and LaunchDarkly. We love Linode. They keep it fast and simple. Check them out at linode.com slash changelog. Our bandwidth is provided by Fastly. Learn more at fastly.com and get your feature flags powered by LaunchDarkly.

Get a demo at launchdarkly.com. This episode is brought to you by Sourcegraph. Sourcegraph is universal code search that lets you move fast, even in big code bases. Here's CTO and co-founder, Byung-Loo, explaining how Sourcegraph helps you to get into that ideal state of flow in coding. The ideal state of software development is really being in that state of flow. It's that state where all the relevant context information that you need to build whatever feature or bug that you're focused on building or fixing at the moment, that's all readily available. Now, the question is, how do you get into that state where, you know, you don't know anything about the code necessarily that you're going to modify? That's where Sourcegraph comes in. And so what you do

with Sourcegraph is you jump into Sourcegraph, it provides a single portal into that universe of code. You search for the string literal, the pattern, whatever it is you're looking for, you dive right into the specific part of code that you want to understand. And then you have all these code navigation capabilities, jump to definition, find references that work across repository boundaries that work without having to clone the code to your local machine and set up and mess around with editor config and all that. Everything is just designed to be seamless and to aid in that task of, you know, code spelunking or source diving. And once you've acquired that understanding, then you can hop back in your editor, dive right back into that flow state of, hey, all the information I need is

readily accessible. Let me just focus on writing the code that influence the feature or fixes the bug that I'm working on. All right, learn more at sourcegraph.com and also check out their bi-monthly virtual series called DevTool Time, covering all things DevTools at sourcegraph.com slash devtooltime. so we first talked ethereum on the changelog in 2016 with Gavin Wood. We then talked in 2018 about Gitcoin with Kevin Iwaki.

We then had Tim Coulter from the Truffle Framework on the show also in 2018. And we've done a show on Brave and Bat. And it seems like every time Ethereum and D-Web and Web3 comes up, I always end up asking like, well, what's the killer app or killer apps, plural, as we may find out today, because it hadn't seemed like it had arrived yet. Like what's going to make people get into this besides the money grab aspect. And nobody really had answers. I mean, brave and bat is cool, but is it necessary? Like,

is it going to drag people in? And it seems like maybe this is a moment here with NFTs. Michael Rogers, you're here. Thanks for coming on. Tell us about NFTs. What's the skinny? Yeah, yeah. They're awesome.

They're non-fungible tokens. If you know you want an explanation larger than the SNL sketch, I think we can definitely get into it. But yeah, I mean, the idea is pretty simple, right? You have these digital assets, digital things on the internet, and you want to have some notion of like, okay, who owns that digital asset? Can we trade it around? Can we buy it? And what it means to own it and what it means to be the token is all sort of nebulous. And I think that we could definitely get into that. But just

kind of foundationally, I think that you have to put yourself in this, in this new headspace of like a decentralized web and this new decentralized web movement, right? You know, it kind of comes back to something that Tim Berners-Lee has been saying since the late nineties, which is that the web doesn't have a data layer, right? Like we've got, we've got a presentation layer. We can link between applications and their views, but we don't have a data layer. And they tried to do semantic web, which didn't really work out. But now we're actually seeing decentralized networks, you know, that are on the internet that, you know, we can kind of leverage as part of the web, right? And they have a lot of web-like characteristics to them. And now we're sort of like piecing together effectively this new data

layer of a decentralized web. So you can make a web application just like you do today, but the backend data for that is not in Facebook or in Twitter or in Instagram. It's not locked up that way. You're actually publishing data and building applications that work with data that is in public databases, right? Blockchains are effectively those public databases along with networks like IPFS for doing the rest of the data delivery. And, you know, so the cool thing about NFTs is not, you know, like, you know, people sold one for like 68 million, right? Right. I don't have any comment on whether or not that's going to retain a value of 68 million dollars. I don't, I don't know. Like, that's not my expertise.

Right. But what I can say is that, you is that what people are doing right now, they're putting all these little images into Ethereum as NFTs, as art that they're selling. But what they've really done here is that they've basically created the decentralized Instagram. There isn't an application experience right now that looks like Instagram. But if you're thinking from a protocol standpoint, where there's this thing that everybody's building on and transacting in, that's what's happening right now that looks like Instagram. But if you're thinking from a protocol standpoint, where there's this thing that everybody's building on and transacting in, that's what's happening right now. People are putting photos into feeds, they're publishing them, then people can buy them.

And that buy, that ownership part, is almost like just metadata in a database. You can think about it that way. And the value of owning it is going to be determined by all these applications that build on that data. So every application that anybody ever builds that shows my gallery of my NFTs that are in my wallet is going to add value to those NFTs. It's a new experience that I get from them. And artists that are publishing them can create new relationships and experiences with those NFT holders and those users directly as well. So, you know, I don't know if, you know, you're always going to have a $68 million image. But I do think that, you know, there will be something like Instagram and every image in it will be an NFT that people own.

And the average price might be like $4, right? But if every image on Instagram was worth $4, that would be the economy of a small country, right? That's a substantial thing going on. Right. I don't think the value of that image is really the NFT thing, though. The NFT thing was the technology that enabled the transaction, so to speak. The value was not depicted or inherited to that art because it was sold via an NFT, or the ownership was established by that. That was just simply the mechanism in which they were able to establish the ownership

or the transfer of ownership, essentially. Yeah. The art itself was valued. I mean, there's a lot of fanfare around this because it's this new faddish potentially or bleeding edge-ish technology that's enabling this. But the value is, you know, in that art because of the art's perceived value, not so much because of the NFT,

but also maybe that's sort of like layered onto it too. I'm sure there was a percentage that was gained because it was sold as an NFT, but not just because it was an NFT. You know what I mean? I think that's where people kind of struggle because you got this technology, this future technology aspect,

look at it. And then you've got certain things now currently being able to use that technology to trade the value. You know, right now art is the bigger way things are happening. Yeah. I mean, art is like the, the sort of easy first use case, right? Like I think that, you know, you have to remember that these NFTs, these tokens, they're just pointing to hash addresses in IPFS for these metadata files and those metadata files. Sometimes. Sometimes they're pointing at some server run by a startup who may disappear.

We're working on that. In an open permissionless network, anybody can do whatever they want to do. But the value of these assets is going to be determined by their interoperability to some extent. So people have an incentive to do the same things. And already the big NFT minting operations are coalescing around the same standard. At Protocol Labs, we're working with them on doing the right thing. We have some best practices out. We also just created a service called NFT.storage where we will actually take NFT data either from the user or we're also just literally pulling it out of the chain.

And we will store that data indefinitely, make it available in IPFS, back it with Filecoin. It'll be available indefinitely. And we're just going to cover that because it's sort of always been part of our mission to do stuff like that. It's really easy to sort of poo-poo what's going on as like, you know, a bunch of GIFs or memes or whatever. But at the end of the day, like this is human culture now. Like this is how we interact with and exchange culture is through like media sharing. And if media sharing is going to move to a public decentralized web, like we want to preserve all of that human culture, right? That's always been

part of our mission. It's like the internet archive, right? Like they're, they're recording it because it's important for the future of humanity, not necessarily because, you know, they agree with every single thing that goes into the archive. Yeah. So the art side, if we just stay there for a moment, cause you're going to take us beyond that and talk about how these things can be used for all kinds of applications. And you're kind of laying the groundwork for there as well. What's interesting to me, and I'm not poo-pooing it by any means, I mean, there's obviously a financial thing going on, but the fact that we've been able to, through this technology, reintroduce scarcity to digital goods is kind of amazing, right? And maybe that is killer. That being said, it's kind of weird because the scarcity is there insofar as I can own that piece

of art, but it's kind of like buying the Mona Lisa and then donating it to a museum necessarily because you can also participate in that piece of art, right? I can own a piece of history, but all I have is like, it's kind of like signed by Jared owns this and I'm willing to pay however many ether to get it, but there's a scarcity on the certificate

or on the ownership of a point in time or a URL or a hash of data. But we can still all look at that data. We can still all do what we want with that data. It's kind of a weird piece of ownership. It's kind of like, I bought the Mona Lisa and I donated it to the world. My name's on it,

but you can also have the Mona Lisa in your house. You're right. It's a new thing. I don't think that it's entirely analogous to the way that we thought about this before, because, you know, like, like I've heard a lot of interviews with people and he talks about how, you know, the Mona Lisa is more valuable because it's in the museum where everybody sees it rather than in somebody's house locked up. And I think that a lot of people's sort of instinctive reaction is to think like, oh, if, if you own it and there's value in that ownership is because you've gatekeeped kind of access to it.

And that's not always how value works. Sure. But the ownership is your, it's your choice because you are the owner. So you can decide whether you want to, you know, maybe I don't care about it. To me, it's completely priceless. I don't care what you value it at. I want it on that wall over there. I want to be the only one in the world with it.

So in that case, the metaphor does kind of fall down to a certain degree, but doesn't make it not cool and interesting, just makes it different. Yeah, it's not a great protocol or a great medium right now, at least, for creating assets where the value of it to somebody is going to be that they control that access to it, that nobody else has access to it. You were talking about scarcity before, and it's like a scarcity of quote-un unquote owning the resource, but not necessarily a scarcity of access to the resource. Like what it's good at right now is allowing anybody to have access, but only one sort of person to have ownership with it. And to really, really understand like what you can do with this, like as a developer, right? Like we want to speak to developers here. One way to think about this is that there's an asset and then there is value. And then the dollar amount that people are willing to

buy is related to whatever the value is, right? I think that people look to the dollar value to say what the value is, but there's actually like a missing piece here, right? Where our perception of value, what people are willing to pay for something has like all kinds of different factors to it, right? And the more experiences that we create around the notion of owning something is going to increase the value of having that thing, right? And even though there's a scarcity here by having one NFT,

you can't think about the value of this being locked up the way that it was in the physical world, right? Like the value of some data that I put into Instagram is to some extent gatekeeped by Instagram. They're going to capture most of that value and that's going to stay within that application experience. And I get a lot of value out of sharing it with my friends

and with the people in that medium. But there's not an opportunity for other developers to create additional experiences on that that add new value to it they really lock down the api and and like the things that you can do around it whereas like on the web right like the value of the web has never been the value of a website right like this goes all the way back to the beginning of the web and when the web was competing against content portals, right? Like AOL was like better, right? And like if your goal was to just get content, like AOL was doing a better job. Like if you liked Oprah, you could put in keyword Oprah and then you would get official content from Oprah in AOL. And if you went to, you know,

do Oprah on the web, you'd have to like go through Yahoo and then find a directory of a bunch of oprah fan sites none of those fan sites could compete with keyword oprah but as a network all of those sites together linking to each other linking to other content on the web that network value was much more valuable than what you got in keyword oprah on on aol right and this is really what like technology and networks are primed to do. It's to create these multiplications of value, right? And so when you think about what the value of an NFT is going to be, it's going to be like there's going to be these network effects on top of that value

generation. If everybody can do something with this data and your ownership of it is going to be turned into all of these different experiences and these different sites, well, then who knows what the eventual value of any of those things are? And it's not just application developers, right? It's not just gatekeep by developers. It's also artists. Like artists can have these direct relationships with their fans and they can authenticate their fans, right?

Like it's not just like, oh, I sold my new album as an NFT, as 100 their fans, right? Like it's not just like, oh, I sold, you know, my new album as an NFT, as a hundred NFTs, right? And people paid a lot of money for those just, you know, to listen to it the way that they would in any other way. That artist can do follow-up content, like they can do a concert and only allow NFT holders to get backstage passes, right? And now all of a sudden that NFT is like your gateway into a longer term relationship with that artist. And that artist is incentivized to do more of these relationships, right? Because that will increase the value of their future NFTs and even of their existing NFTs. And one thing that we haven't really talked about here is that the Ethereum contracts and all the chain contracts,

they allow the artist to put in a sort of percentage of future sales in the physical world, right? Like once you own a physical asset, if the secondary market never really goes back to that artist, like sometimes you have like really complex legal relationships, like around the ownership, but for the most part, like, you know, the fact that a painting that you did 20 years ago is worth a ton. Now you might not see any of that money ever, right? Like that's already gone. Whereas 20 years ago is worth a ton now, you might not see any of that money ever, right? Like that's already gone. Whereas like you can actually put like, okay, 10% of all future sales are going to go back to the artist.

So as all these assets are getting more and more popular, that's also like giving them continued income as people trade them. Right. If you can dream it, if you can code it, you can make that rule set into whatever it is that you're assigning the value to. The reason why I go to the ownership and the gatekeeping and the put it on my wall in my room versus have it in a public museum is not to degrade what it is, is to say, if you're saying that these NFTs and this network is kind of the data layer for decentralized web, and then it leads me to think, well, is decentralized web inherently public and accessible to all? Or is there any ideas of privacy and security?

And can I have my data on the decentralized web that's not accessible by anybody else? Or does it have to be this way? Well, one thing that we should all be very, very attuned to nowadays is that if the data is not encrypted, it's not private. It's just waiting to be hacked. So there's a lot of quote unquote private data that's sitting in application databases, not encrypted. It's either public or future public. Yeah. And that is eventually going to get hacked and leaked, right? I mean, I think all of our social security numbers are just out there now because the state department can't maintain servers apparently. And these leaks are just going to keep happening. So one of the nice

things about this decentralized web is that in order to do any sort of permissioning or have any of these assets in something, their encryption has to be involved, right? And so everybody has a public key that they're using for one of these wallets. And hopefully, you know, there's a lot of decentralized identity work going on so that we can have longer term identities that are attached to, you know, us and social networks, as well as, you know, we can publish that we also have these particular public keys for these wallets and these different networks, right? And we can tile that information together. But, you know, that gives us, you know, a lot of access to encryption utilities to make private data and to then put that data and exchange that data in a lot of the same networks

that we're using for public data, because nobody will be able to see it. There are some additional concerns that you have to layer on when you do that. And there's some complexity here, too. Like once somebody decrypts something, they have a copy of it, right? So a decrypted copy of it. And this has always been true of all of these different services, right? Like you could have just like taken screenshots of that data before somebody stopped your access to it. But in practice, people don't really do it with nfts right like or with anything that you're talking

about in in one of these crypto chains every time that you transfer it you're going to have to re-encrypt it for the new destination and as it moves custody each person who had custody of it would have had a decrypted copy of it right but when you're thinking of other use cases on the decentralized web like private messaging and stuff like that, these don't really apply. There's a bunch of private data use cases that are being worked on. I think that we should expect that the first thing that actually works in the decentralized web, the first kind of set of killer apps that are coming out are around NFTs and around public data, because it's just easier to work with public data. Doing additional auth and encryption and stuff is extra work. And so we're going to figure that out.

But you really have to recognize how immature the whole space is. It's not like there isn't one blockchain that we're talking about or one protocol that we're talking about. We're talking about dozens of these things that we're wiring together and often transferring assets between chains. There's a lot going on here. Just like on the web, there's not going to be one winner at the end of the day. There's going to be a lot of interrupt. You have to be very future-looking to grasp what's happening.

This is infancy, really. If we're thinking maybe in terms of maturity and age, this is a brand new baby. This is a newborn in terms of technology. Oh, yeah. And it will mature. Yeah. The one question I hear that a lot is what do you actually own? And I like when you shared a sort of deeper look at what you actually own, where you might

have access to future opportunities, not because of the ownership of an NFT, for example, because that's the one question. What do you actually own if it's digital and the Mona Lisa example, and everybody can still see it, and what do you actually own then if you just own this metadata and the decentralized web, for example? Like, it's pretty ephemeral in terms of what you actually own. But I like the idea of how you explain it, that you have possible future access to insider-type stuff,

which I think is valuable. And so you may not really care about the value of that item, but you're willing to pay something for something if you get something else in the future because of owning that something. You know what I mean? You know, it's like an insider access thing. Yeah. So much of what we own is about broadcasting that ownership. One of the reasons, like, people would not buy ugly, fancy cars, right? Like, there aren't really fast sports cars that don't, like, look nice.

I don't know about that. There's no accounting for taste. There's no accounting for taste. Yeah, yeah, yeah. And so a huge amount of this, too, is that in public, people can see that I own this thing. Yeah, you're projecting. And people can create those experiences that broadcast that ownership, right? Sure.

Is that where we're at right now then? Well, a lot of it's to be a part of something bigger than you as well. I mean, we look at the recent movements and, you know, with the GameStonk thing and everything. Right. A lot of it's like, I want to be a part of something that's cool and big. And so I don't care if there's no value here. Right, a movement. I'm part of this movement and I'm broadcasting that I'm part of this because, you know, I have diamond hands or whatever they say over there. Yeah, and I think unlike how we build things on the current web

with centralized data repositories that are fronted by APIs, there's no permissioning to get access to this data. There's no permission involved in creating a new experience around this. So if there's an artist that I like and I want to do a fan site where people can talk about that artist, but only people that own an NFT of that artist can actually talk, then I can build that and I don't need any permission from the artist or the holders or anything. I just say, come and prove that you have one of these wallets and now you can talk. Now you can participate. And anybody can go and build those experiences.

Permissionless innovation is kind of the cornerstone of a lot of like big technology movements. And that's definitely what we're looking at with Web3. Unfortunately, what it reminds me of today, and like we said, it's an infant, right? Is do you remember how you could buy a star? Do you guys remember those businesses? Yeah. You can put your name on a star.

And I thought whoever came up with this business was brilliant because they basically just had free but finite supply of a thing that, you they're just right up there and now you come to me and i'll put your name on that star over there you know and which is basically just a centralized registry there's the difference it's centralized where on that company's ledger your name's next to that particular star there's a line to draw there you can actually prove that you were the first one to do it here as well right like these these public chains have public timestamps so you know if somebody goes and auctions off all the stars and then somebody tries to do it again in a different chain you can go i don't know i have

an older one over here this is actually a good startup idea sell a star on the blockchain boom nft stars we should actually stop recording right now and start coding that yeah because this dog has the dog hunts it does does hunt. I like that. Michael, can I ask you a personal question? Sure. Have you bought an NFT? Uh, I came very close to buying an NFT and then the, uh, like the, the transaction didn't quite go through.

If you thought centralized bugs were bad, now we've got decentralized bugs. I've been so busy, like digging through the data and setting up all of this extra stuff like i'm in the the the shovel making game not the speculation game right like people are always asking me about crypto because i do work at a crypto company and i was like i'm the only person that doesn't buy these things like like i work at a company they're they're granted to me as part of my employment like you get stock right and so i'm like the wrong person to ask about where to buy and trade them. Well, at Worst State, you're sincerely excited about these technologies, but make it clear, you have a dog in the hunt. So far as your employer is Protocol Labs,

who has Filecoin, and there's NFT things going on. So this is very much related to your work, which is why you're knee-deep in the technicalities, which we definitely want to talk about the technicalities. One of the things that I've noticed is a lot of the successful art place NFT things happening right now are by the NBA is doing one, like Top Shot. They're selling moments and stuff, kind of a cool idea. And it seems like it's working out. They're selling a bunch of them. But is that part of the Ethereum network?

Is that just like they got? Because they could just have their own database and be like, well, it's Top Shot, it's buying NFT. But they don't have to be doing it legit, do they? Well, so that application was built by Dapper Labs. And Dapper Labs has their own chain called Flow. So I believe that all of those assets are on Flow. I haven't validated that.

But Dapper Labs are the folks that created CryptoKitties. So they've been in the space a long time. They really know how to build applications. They built Flow out kind of for their own use. I mean, this is like a is a good segue into transaction fees and some of the problems people had in Ethereum. Ethereum is getting a handle on this. But I think that on some level,

I don't know if they're ever going to catch up to the demand. There's so much demand to put things into Ethereum mainnet that the moment that you make it a little bit more scalable or a little bit cheaper, you just open the funnel of more people coming in. Right. And then all of a sudden, like the fees are back up again. Skill gets more scale. Exactly. Yeah. Yeah. And I mean, again, like this technology is so new. Right. Plus, because it's decentralized, even the development has like a lot of players who are interested. And like, I think moving fast is probably way harder than if Ethereum was a startup, right? It was like eight people in a garage.

They could probably move faster, right? Than it is with where you have probably governance issues. I'm sure there's, I don't know how Ethereum works, but I know there's like a core team. But still, you have to get that rolled out to all the people running nodes and validator or whatever, however it works. Tough, slow. It's a whole ecosystem. So there's a bunch of other blockchains as well. There's chains that are very compatible versus have some difficulty with compatibility.

It's important here to separate what is a technical limitation because we just haven't figured out what to do yet, but there's an incentive to fix it versus issues that are actual incentive problems. The players in this industry don't want to do this, and so it's not going to happen. There have been things floated to do in Bitcoin that would be good for the people that use Bitcoin, but maybe not good for the miners. And so that stuff in Bitcoin is probably not going to happen

and may happen in some of these other chains that are being created. I think transaction fees, there's nobody who wants all of the transaction fees to be super high, actually. The business model here is to be super high, actually. The business model here is to mine new tokens, and the utility of those tokens is somewhat affected by how difficult they are to transact. So there's a real incentive to try and get that down over time rather than up, because that's just not where you're making money. Nobody is making money on that. They want to get it down. The same thing with the power consumption.

Nobody wants to pay extra power bills. Everybody's trying to get the power consumption down. It's just literally a technical problem that we're iterating towards. And Flow, for instance, like we just talked about, and Near Protocol for that matter, they already use proof of stake and use way less power. And they have much lower transaction fees. Not because of that, but because of other reasons, mostly. Anyway, if you look at the ecosystem as a whole, you don't really have a transaction fee problem because you have all these other chains that you can use that have very low transaction fees. And if an asset gets to a certain price, you can actually move it to Ethereum, right? And not every protocol has worked out exactly what this is. But if you look at like

one of the really popular things right now is called Polygon. It's these side chains that are Ethereum compatible, which means that they look more you know, more or less like Ethereum. And so if you ever want to transfer an asset from there to Ethereum, you can. So there you can, you know, create assets for, you know, sub penny, do all these transactions. And if some of them get to be like a million dollars and you really want to like put them in the more secure, stable, broadcasted network then move them to ethereum and pay that transaction fee right and i think that the the way to look at this evolving is that the way that you have to scale it is through more decentralization not more centralization so the solution is not to you know get everything into ethereum and make ethereum like so good that it has you know sub penny transaction fees and is doing you know like a billion ops a second or

something like that's not realistic. It's fine to just have these side chains and to have the assets move around. At Protocol Labs, like, you know, one, Vinay, who started the company, he's always had a lot of vision about how this stuff works in the future and about this kind of protocol interop. And we've been working on standards and protocols that are just open source, open protocols that we implement. A lot of people, I think, for a long time thought that we were over-engineering. They tended to be like, oh, why wouldn't you just do your own custom thing

like we're doing over in this chain? And we were like, because it's not about your chain, it's about the compatibility between the things, right? And now what you're seeing is IPFS is being used in all of these chains to talk about the data because our addresses and our protocol is not tied to a specific chain right it's not even specifically tied to filecoin for that matter right like you can you can put stuff in filecoin and it like matches all of our primitives because like we

built both of these technologies but it's not like you you can't you can have assets anywhere in the world mirrored for whatever reason and available in the IPFS network and participate. We're not like gatekeeping that with one chain. And that's why sort of IPFS has just become so popular. And, you know, we certainly have a vested interest in IPFS, but it's not like we sell it. This is an open protocol. Give us the 30 second rundown for those who don't know what IPFS is. Yeah. So I think since we're talking about NFTs, the best way to look at it is to skip over some of the more file system-y aspects of it and just think of it as addressing and availability in a peer-to-peer network. So if you give it some data, then it's going to be able to give you back a content ID, which is a hash with some other data in front of it that tells you what you can do with that hash and what kind of format it is.

Again, we've really thought about future-proofing these technologies against, you know, future hash functions and different use cases. So you get this address, and you have an URL scheme where you can actually even path into that address. And so you have, like, ipfs colon whack whack that address, and then you can path into it. And that is effectively a Merkle tree, right? You can think of it almost like when you do check-ins with Git,

you get that hashback, right? And that hash is, you know, immutably the state of the tree at that time. That's what you get out of IPFS. You get the immutable state of that tree at that time. And that's really important because in the IPFS network, which is this global peer-to-peer network for getting the content, you can say, hey, who has this address? And you can find anybody on the internet with that address and you can pull it from them. And in a trustless manner, you can validate that that content is the content that they said that it was, right? And what IPFS does is it takes really large files

and breaks them up into parts and does all of that stuff like BitTorrent does as well, right? Like when, if you actually look at a BitTorrent file, you'll see all those parts in it. And that network functions a lot like that. And then we have up what are called gateways. Cloudflare has a gateway. There's a bunch of different gateways. But gateways are just HTTP endpoints where you can say, okay, HTTP endpoint slash IPFS and then give it what was in that IPFS URL. And it will pull that data out of the network and work like a CDN basically for the current web. So if you don't have IPFS protocol support like in your browser, like most browsers right now,

you can just use these gateway URLs. And then we're working to get IPFS native protocol support into browsers. It's in Brave right now. If you want to just try out what first-class protocol support looks like, you can try out Brave. This episode is brought to you by our friends Thank you. code at any time, even if a feature isn't ready to be released to users. Wrapping code with feature flags gives you the safety to test new features and infrastructure in your production environments

without impacting the wrong end users. When you're ready to release more widely, update the flag status and the changes are made instantaneously by the real-time streaming architecture. Eliminate risk, deliver value, get started for free today at LaunchDarkly.com. Again, LaunchDarkly.com. So you can tell that we're dealing with nascent technologies because I'm a relatively savvy developer and my head's spinning just a little bit. And Michael's getting deep into the weeds. Break it down for us. Simple terms, developer perspective. How do NFTs work and how would I issue one? Or I don't even know how you talk about interacting with them, but how do NFTs work? Right. So if you want to create one, you do what's called minting, right? And so to mint an NFT means you take the data,

put it into IPFS. You can use this project that I talked about, nft.storage, and that'll handle getting all of the data in IPFS, creating the metadata file, getting you kind of what you need to work with an NFT. But then you've got to pick a blockchain that you're going to use. And what you're going to do is you're going to develop a contract around how that NFT is used. And then you're going to reference that IPFS address for that metadata in that NFT. Right. And then you're going to use the user's wallet. So the user that is minting the NFT, not the developer, this is the user's wallet, will then sign that transaction and put that into the network.

We can link to an example of how this all works, actually. It's probably a little bit better. There's a blog post about this little project called Minty that we wrote at Protocol Labs that does some minting. If you're pulling apart these different components, there's parts of this that are on the developer and parts that are on the user. The user has to have a wallet around. And there's different ways that different applications have approached having that wallet. So there's a project called Metamask, which is a very popular wallet for

Ethereum. You can use Ethereum wallets in a lot of other chains as well, right? It's a public-private key, right? But Metamask is really nice in that that stays in secure storage on people's devices. It's never shared with the application, right? So there's no sort of men in the middle stuff. There's no custody issues. It's always the user's address. That's a really great one. But a lot of these projects have found that like getting people to set up MetaMask, getting people to set up these wallets is actually like a big barrier to entry. So a lot of the NFT minting sites that you might go to will just create a wallet for you and they'll hold on to the public-private key pair.

And that can be problematic because if they get hacked, your private key is gone. And also they could kind of run off with it. You really want to have custody of your wallet in this ecosystem. But again, it's really young, it's really immature. The user experiences around wallet custody right now are not entirely worked out very well there's a bunch of sites where you have an account with them and they have that wallet and then they're handling a lot of the signature stuff

for you when you mint these nfts so maybe break down roles then you got this idea of a mentor right maybe is there an artist role is that sort of like just only faddish maybe for now maybe artist isn't actually there maybe the creator the original owner you then you said consumer you got developer in there there's a couple different roles in the process to mint establish a contract what do you think of in terms of like different roles involved yeah so this actually changes per application a little bit right I think that the best way to describe it might be author rather than artist. Okay. Because there is a person sort of creating the NFT, like the tokenized part of this,

right? And they may not be the person who created the original work. Like if you've seen these sites that do cementing of tweets, for example, right? Like a lot of that is like there is actually money shared with the author often, like the person who created the tweet. But there's also a sourcer. That's not the word, actually. But somebody is digging through these and sourcing which of these might make good NFTs. Which of these is worth the $20 transaction fee? A curator.

A curator's probably like that, yeah. And so they're sourcing these, and so a percentage of that. That's like selling stars, though, right? I didn't write this tweet. Jack Dorsey wrote the tweet, but I think it's good. I'll sell it to you for $20. What's up with that? That's not cool. So as long as you're the first one, right? As long as you're the first one! But no, I think not every person wants to go and dig through all their tweets and pay $20 transaction fees for the ones that they think are going to be worth it.

Okay, so there's the speculation, because I have to actually pay a fee in order to mint that, because there has to be an entry onto Ethereum. But it doesn't have to go onto Ethereum, because it could be a different blockchain. Plus, it could go on one of these sidechains, so can get it cheaper is what you're saying yep yep but i mean when you're working on a side chain right now you may not be involved in some of the other auction sites right so right now there's a bunch of auction sites that that are all sort of like showing you available or not even options like just sale sites right that are showing you different nfts that are you know potentially available purchase. And those sites like are all working on the same database, right? Like they may have some

information on top of that. Like they may have some private information that they got from that user about like what they might be considering selling an ad or something like that. For the most part, like this is an open network and all of these little application features, like, you know, having like a wait list of people that might say that they would pay a certain amount, eventually all of that will also make it on-chain as well. All of these little pieces of information can be put into the chain over time as long as we figure out the right protocol. So you have a lot of applications all looking at that data, and they might not be looking at the sidechain. You know that they're looking at Ethereum. So you have access to a much bigger market right now if you put it in ethereum than somewhere else and you know as these other

sidechains get popular they'll they'll be more it's kind of part of the speculation even it's like kind of like which which marketplace do i want to be a part of well ethereum has more eyes but it's also going to cost me more to get on there right so there very much is an economy around these things doesn't this make you wonder like don't people have mortgages or don't they have groceries to buy it's like people are just swapping money around on these networks to just buy and sell gifts to each other. I mean, you know, here's a tweet. I didn't write it, but I liked it. Do you like it? You like over 20 bucks? It's like, I like it, but I got groceries. I mean, how much money are people spending in games right now, though? Like people spend

like a crazy amount of money on in-game assets. And there's none of this kind of security around it. Just thinking about in-game assets. So surely digital goods inside of games is probably a rich space for NFTs as well, right? Because you could buy something inside one game and then own it in the next version or on a different game.

Maybe it's that same you bought a blouse over here and now you can use that same blouse over there that's pretty cool and there there are already you know creators that you know build new in-game assets that are very popular and and those people like are always seeing their their works forged right and people saying that they have one who didn't actually buy one from them i knew somebody who made their living from making things in a game yeah yeah somebody who made their living from making things in a game. Yeah. Yeah.

Yeah. They made their living from making art. Second life. Yeah. In second life, they could, and no names dropped here for scarcity and security and anonymity. But I knew somebody who literally made their income.

It wasn't a ton, but it was enough to live on from just making in game art things that you can use, wear, share, ride, horses, like all the things, you know, like an object in the game that you can use in some way that was unique because it was by them, scarce because they could only make so many. And I suppose artistic because creativity required. Really, the best use case that we have right now is probably this in-game stuff. And you can actually see how this ends up really decentralizing a lot of game development in general and new games. If you can imagine, okay, we have a format for this in-game asset, and that game becomes really popular, and a lot of people have created these NFTs now.

Well, like if I created a new game and I wanted to like leverage all of the assets that were already created, I just need to be compatible with that asset now. And I can look at that chain and pull all that data out. And everybody who comes in and authenticates with those wallets, I can say, okay, you have those end game assets in our game too. Totally. And then you've got new people creating things in your game and you're leveraging this existing game. Derivatives, yeah. Authenticated derivatives. Exactly. So now we're building networks of value

and the value of the asset is not just tied to one game. It's all the games that I could ever use it in. Yeah, so now you're driving cross compatibility whereas the incentive for the game creators before that was to actually hoard everything. But now the incentive for somebody who's an upstart is to be compatible because they need to transfer that network you know whatever your stuff is in to make this game actually worth playing exactly like nobody who's you know making

a ton of money right now sell it like having their own locked down in-game asset store is going to you know move all that to a public thing that other people can leverage yeah they're like why would i do that you just need one to be popular and then the next wave of games will build on top of those assets. Can we go back to that minting process though? Because I wonder if, is an NFT exclusive to digital? Because you said it has to

be an IPFS. As part of the minting process, you said put it in IPFS as the first example. You should definitely put it in an IPFS so that there's an immutable reference, right? So that people can't say that it's something else in the future. Like if you made it an URL, then people could change that. Which some of them are, like point to an S3 address. And it's like, well, I could just go see that for lack of a better term.

So yeah, we're working with them to stop doing that. But also, you know, something that we're looking at doing is just, okay, when we see these on chain, let's pull whatever's in that URL at the time that we see it on chain and put that somewhere. In IPFS, we have this thing called a mutable file system. So there's actually a mutable reference to the directory structure. And then we can just create basically a file for that URL for every one of those assets so that we have a backed up copy of whatever it was when it got minted.

Like we're looking at doing that. We haven't built it all out yet. So minting is a digital thing. Yep. Does it have to be a digital thing? What you're minting, right, is just some bytes. Some bytes, okay. That's all.

So it requires something to be digital. Could it be a picture of the real world thing and that's the picture? You could take your title, your house title, take a picture of it. Right, okay. So somehow it has to become digital. authentically digital yeah and as the mentor you are the owner of that minting so there's some sort of original like ownership of i'm the original

owner or whatever the roles were you said before as part of the minting process that says this is authentic from me i am me and i am whoever i am and this is my thing and i'm minting process, it says this is authentic from me. I am me, and I am whoever I am, and this is my thing, and I'm minting it. And now the new owner gets it from me or the application or wherever I auction this thing off at. They authentically buy it via NFT, via this process to say they're now the owner of it. But me as the mentor, I minted this digital thing or this physical thing turned authentically digital into IPFS and immutable file system. I minted, I'm the owner and Michael, you bought it from me or you won the auction and now you're the owner. And NFT proves that you're authentically now the owner and there's that chain forever. And if ever you sell it or exchange it, you know, on goes the ledger.

Exactly. Exactly. I think it's important to sort of differentiate what the protocol enforces and what it doesn't enforce, right? Okay. Because you said there's a contract, right? There's a process to define what you can do with it. Yeah.

So like the Ethereum VM, like lets you do some cool stuff. And there's a specification for like how these tokens work, these non-fungible tokens work and what some of the metadata says. But one thing that you really need to keep in mind is that the reference that you put into the NFT that's minted on chain is a reference to a metadata file. It's not the hash of the content necessarily. It's like, you know, metadata about that

and then the hash to the thing. So, you know, if you alter that metadata a little bit, you get a new hash and it effectively looks like a new NFT. So the enforcement of uniqueness, right, is not really happening at the chain level. It's happening at like a reputational level on top of the chain, right? Like this is all in a public database somewhere. And so when I, as the artist, noticed that like, oh, there's a bunch of forgeries of my thing out there, we will have an open reputation system where they can say like, here are all the forgeries. And now everybody who's building applications around it will note that like the forgeries

are not the real thing, right? Like, but that's not enforced on chain. What can be enforced on chain though, is that if people transfer this asset for money, if they say like, I'm selling it to you for this amount of Ethereum, then percentages of that fee of that cost can go to different wallets that were pre-config amount of Ethereum, then percentages of that fee, of that cost can go to different wallets that were pre-configured into that, right? Is that right? Okay. Kind of bake it into the process. Whenever I sell it, 10% comes back to me as the owner goes, hey, I want to have royalties.

Exactly. The idea of royalties or something like that. I want to kind of maintain, you know, capital, wealth coming from whatever or value. Right, right. You know, there is a workaround here right like you could you could do an offline deal with somebody for money and then you know transfer it for one ethereum for one ethereum is a lot of money actually like just for you know very little money like there is a workaround when an asset current value of one eighth is 2300 from my understanding okay so that's still a decent change but But yeah, I mean, there are sort of

these offline workarounds, but in practice, nothing but really specialized use cases are going to fall into that, because you have these open networks of different people offering to trade and buy these, right? And everybody

can transact in that system. So if you really want to get rid of something, if you really want to sell it, you're not going to try to score some kind of offline deal. You're going to make it available on all of these sites that all can sell it because that's how you're going to get the most amount of money, right? And reach the largest number of people. And I think something really cool that we haven't really talked about here is that the experiences that we create around all of this can have new types of feeds and new types of events happening when assets trade and what their value is, right? Like this is all just metadata in a database effectively, if you think about it that way. So like if I'm following you on Twitter, I will see, you know, anything that you create and anything that you buy. And also maybe when you trade it, or maybe something that you owned years ago that

got traded. And that's like interesting, right? And that, that dollar amount is interesting, right? Or, you know, like not just looking at a tag, but any tag that is selling for over a particular amount, right? You can take all of these different sort of pieces of metadata and think about sort of shoving them into a relational database and creating all kinds of new web experiences around them. And I don't think that we really have a full understanding of really what is available to people when you do that. Not to mention, you know, I can just decide to create a new experience around a set of NFTs that that have been sold. Right. Like I really liked this collection of stuff. I want to offer something to just those people. Like, I can just say, you know, here's the NFTs that, you know,

the holders have access to X, Y, and Z. Like, these are entirely new ideas that are coming about and are, like, you know, made practical. So you don't have to sell them. You can give them away. Yeah, yeah. I mean, a lot of the most expensive ones right now were given away. A lot of the original CryptoPunks were just given away for free or for pennies. And the fact that you can contract in with the minting process some sort of kickback as part of it all. Like the original creator or the mentor or whatever rules were involved and how you can code that if that's the possibility

as you said in the Ethereum VM. That makes it uniquely interesting because you have a vested interest I suppose in the Ethereum VM. Right. That makes it uniquely interesting because you have a vested interest, I suppose, in the history of it. You know, the ongoing history of something too, as it sort of travels in from obscurity to notoriety, to importance, to infamy, or whatever it might be, you know. Right.

All these different ways, something can become more or less popular or valuable to people. Right, right. And I guess the interesting part is you can, because it's metadata in a database, you can pay attention to it and, you know, trigger things. And things can happen because something else happens

or thresholds are met or whatever. Like you can really programmatically exchange and pay attention to the digital world in the future. And because all of these are protocols and because they're all cryptographically secure, there are new things that we could do that we weren't able to do before around securitizing them. Right. So like you can you can literally do something like create a sort of decentralized autonomous organization, right, like a DAO and say, OK, well, this this DAO is going to get this amount of money from these people to buy these NFTs. And then it's going to sell them on this particular cycle. And then that money is going to come back to those people.

And you can even sort of, you know, wire up decentralized finance into these systems. Right. So people can like trade assets related to the entire life cycle. This is super complex. Yeah, yeah, yeah. But I mean, it can get really deep. I mean, I'm fine. Keep going.

But just commenting that can give you it can be really entangled. Yeah, it can get really, really crazy. But you can have like basically automated versions of royalty programs where investors are investing in and speculating on the value of these royalties over time. Right. Right. And you can literally securitize that into like shares that pay out on particular cycles it's a very like interesting yeah brave new world like of what you can do in a completely trustless decentralized system and a lot you know a lot of the primitives and and that you need for that stuff to really work is like still being

worked on and not quite this is not something that web developers are just going to pick up after boot camp and and go into like you into a lot of these more advanced financial stuff. But it's getting easier every day. And in the NFT space in particular, what we're seeing is that a lot of new developers have come in. And a lot of these new developers have figured out the right ways to just plug some of these gaps. And again, this works really well when all the data is public and all of that. We move around some of the other problems that are still being worked on. But as this matures, you're just going to see like more and more of this stuff happen.

I have to say that this explanation of it is much better than SNL's version of it. Well, they did that quick. I mean, it was obviously it's meant to be comedy, but, you know, mine is not a rap. All of it could be. But even going back to Bitcoin, i can recall bitcoin two christmases ago when snl did that skit on it like it was like somebody got slapped at a kitchen table i can't recall the the skit but like it didn't do a good job of explaining bitcoin it actually made it it was well it's a joke though right of course it is but there's always explanation in comedy they're

not trying to explain it to try to make fun of it but sometimes the best way to learn is through comedy right i mean it's it's an emotional uh charge that's the one where like it's like the trying to explain it to try to make fun of it. But sometimes the best way to learn is through comedy. Right? Yeah. I mean, it's an emotional charge. That's the one where like, it's like the 50 year old-ish moms that were like

just talking about Bitcoin and they're like, it's Bitcoin. You got to buy some. Or I don't remember. Like that was it. Right. I put all my savings

in Bitcoin. He did what? I mean, they just, they made a lot of money though. Like if they did do that, I mean... Yeah, if you would have bought Bitcoin that day that that came out and just held it, then you would have been as smart as those women.

I mean, the market's volatile, right? Like, it's up and it's down and it's up and it's down. And we've seen, like, I don't know, three or four crashes at this point. But every crash has a higher floor, right? Like, if you look at it over time, it's done incredibly well. I mean, Bitcoin's something like over $50,000. Yeah. What's interesting is how larger, specifically on the NFT train, you know, which is, you know, running parallel to the Bitcoin train, but on different tracks, right? The NFT train, it's interesting how quickly large organizations

are hopping on this one, you know, in terms of there's the skepticism level is much lower. So like I said, MBA is doing their top shots. And then you have was it the New York Stock Exchange or the Nasdaq, they just announced they're gonna start selling the moment that a new company IPOs you can buy that moment. So today is actually the Coinbase IPO. And you could have bought the Coinbase IPO as like an NFT, and they're selling those things. So part of it's because, yeah, it's kind of easy money, I bet right now. But also it's like, there's no skepticism from it's either NASDAQ or NYSE. I'm not sure which one. They're just like, we're in, let's do it. Let's sell some times, you know? So it's interesting.

What does it cost them to do that? Right? Exactly. It's very, yeah. I think that it's even bigger though, when you're looking at artists and content creators. Because what they do already is create content. And it has been so difficult to figure out what the monetization model is for that content. And we've seen a lot of companies try to show up and be the right intermediary for that. Some of them have done a really good job and are quite good. I really like Substack and I think that they've done a lot for those writers and stuff.

But you can't make money on Spotify unless you're the biggest artist in the world. A lot of the way in which we do media now, you can't sell the actual digital production. The thing that you create digitally isn't something that you can actually derive a lot of money to you and most of the value is actually captured by intermediaries so this is like a really sort of new amazing thing for artists where like they can create something and they can have direct relationships with their fans who want to buy it and own it and they can continue to create value and experiences around owning that over time and everybody can participate in that right like it's it's easy for them to go like okay great like i'm creating stuff i'll create more stuff i'll create stuff that's an nft yeah it's like the the asset isn't rare but the the artists themselves is rare you know like the

relationship with the artist and the association with the artist themselves is what the value is you know sure this song is also on spotify You can go stream it right now. Or this song can be by this artist owned by Michael Rogers. Right, right, right, right. And going back to who owns my NFT songs, that list is probably somewhat short, at least. It's more finite than the listeners on Spotify, for example. Millions of listeners potentially or more on Spotify for a given popular song, but only a small handful of owners NFT-wise of my tracks. Well, if you sell your NFT to a million

people, then you're shooting yourself in the foot. That's not the point, right? True, yeah. Or maybe it is. I guess that's the point with the decentralized web. You can just do whatever you want. Is there going to be an NFT strategist sometime soon then? Oh, that exists. Yeah. Oh, I'm sure that exists. Yeah.

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that makes it easy to investigate any cost, CloudZero gives you complete cloud cost intelligence, connect the dots between high-level trends and individual lineups. Join companies like Drift, Rapid7, and SeatGeek by going to cloudzero.com slash changelog to get started. Again, cloudzero.com slash changelog. I mean, honestly, like this whole space is really going to blow up. I mean, this is, this is web three, like,

this is what we're talking about. Right. And, and web three, you know, everybody's been talking about like, when is it going to hit? When is the killer app going to happen? Right. Like when is the moment going to happen? And I think this is really it. Like, you're seeing a huge amount of adoption and a huge amount of new applications being created. And, you know, regardless of what happens with the NFT craze, like as a thing or as a buzzword, all of the development tools and practices and understanding of how to work with these things and how to build these experiences, that experience is just going to accumulate with the people that are early right and those tools are just going to continue to be like set the standard for what people are doing in the future around web3 and dapps so even though it is early and it could you know crash again for a little bit

i think that the technology and the tooling and the knowledge that you get by being there early is really invaluable i really like encourage people to come into this space. Well, like I said, we've been covering Ethereum for years, and Bitcoin a little bit with BISC, decentralized exchange. We've been tracking these things, and the technology has always been very fascinating, and it's always been a bit inscrutable

and hard to wrap your head around. And I've always been saying, regular people aren't going to use this. Something has to draw you in because it's too hard yet. And it's getting easier and easier. And the market cycles have happened. I've been along for the ride watching it, you know, the waves and they crash. But that whole time, like the community, they just keep on developing, right? They just keep on coding, they keep on improving. And it's gotten better and better and better to the point where like, okay, it's starting to get pretty compelling. Like this use case, it's a new thing. It's different.

And it's compelling. I mean, people are doing it. And there's gold in them hills, right? And now all of a sudden artists have some sovereignty over their creations, which is new. And they're going to go ahead and collect some value, then put all this value into the world, they're going to start collecting some. So the market cycles will continue to cycle probably in general, generally in an uptrend so far. But I agree with you that the technology is getting more and more compelling. That being said, challenges all along the way. And it seems like so far, the challenges have been energy use, and scaling and then just like user interface or user experience yeah i mean the scaling stuff is all being worked on and it's all making progress like like that that's one of the parts that i i worry about kind of least to be honest where where i really get get more

concerned is like okay how quickly and and how can we kind of parallelize connecting real web developers today and what they can do and what their capabilities are with interacting with these protocols. You don't think about... If you were a web developer in the mid-90s, you knew HTTP. You had to figure that out. That was a part of your workflow. Web developers today don't necessarily need to know how HTTP works.

Not to the degree that I had to learn it. They understand that it is a thing. And that it is in their urls. They have to know headers. They have to know verbs. They don't know that there's a misspelling in the refer header. They don't need to know that. Yes, they do. Come on, Michael. Give them credit now. You are not talking to people that just came out of a boot camp, man.

No, I'm talking to you. The thing is, one of the things that really makes web development web development is that everyone is new, right? It's growing so fast all the time that everybody has just come to it. And we're constantly just making it easier and easier, right? I love what's going on in the no-code community, where it's just like, let's just take programming out of it, actually. I think that we can just embed a widget here and just be done.

And I think that is in a lot of ways where things are kind of going. What I really kind of want to see in this technology and where I feel like I can really provide the most value, to be honest, is where do web developers touch these protocols? And how do we very quickly make the protocol just an implementation thing that you don't really worry about anymore? And if you look at NFT.storage like that's really what we've done we've kind of just taken all of the work out of like encoding the asset getting it available in ipfs like you know we're storing it in filecoin kind of on your behalf you don't have to interact with deals in filecoin like we'll just

we'll handle that and but you know like i can't you know make the ethereum like the ethereum transaction stuff different right um i can't uh you Ethereum transaction stuff different. We are not a wallet provider, so we can't solve that specific problem. So what I'm really looking at right now is, how is everybody solving this problem? What are the best practices and things that have shown up as real outliers in terms of user experience? One that we found three weeks ago, or we mean, we'd seen it before, but, but we didn't realize how rad it was. Have you ever used magic.link for anything? Magic link service? No. So man, if you've ever dealt with auth tokens, if you've ever had to like, like involve yourself in that mess and write that from scratch, which I'm sure you have actually,

magic link just, just handles auth tokens. Like it just, it just deals with this whole problem for you. And so whether you want to have like login with GitHub button or login with Twitter, or you just want to email somebody a magic link that just gives them a JWT token, as a developer, you don't have to set up that infrastructure. You don't have to deal with all of that stuff. You can just use their toolkit. They also, though, added support for just wallet signatures. So if one of the things that you want to accept rather than having people log in withithub just have them sign with their wallet and get an off token that looks like you one that you would have gotten any other way you now have that as well that's cool yeah yeah so that's a really nice way to say okay now we can provide like literally like

you know widgets that anybody can put on any website and you don't have to have a developer token you know with with a service. You can just sign it with your wallet and we'll take it. Yeah. That's like a really powerful thing. Love that. The real value of open protocols, right, is that you get to build an ecosystem

that solves all these problems once and then everybody leverages it, right? Yeah, like that was what earlier when you're saying like, we'll have a reputation system. First of all, who's we and where is this reputation system? You know?

Somebody will build it and then it'll win. One of them will win. All of us. Yeah, yeah, yeah. Eventually somebody will build a reputation system. Like, first of all, who's we and where is this reputation system? You know? Somebody will build it and then it'll win. One of them will win. All of us. Yeah, yeah, yeah. Eventually, somebody will build the reputation system. Trust the ecosystem. Yeah, yeah. Who wants to build a reputation system, though?

Come on. Look, I was one of the first people to, you know, do Node.js development. And there were no libraries and there was no NPM and there was nothing. But it was also like a really fun experience to be part of that ecosystem and filling in those gaps. And then when you see that ecosystem take off, when you see what people can build and how many more people flood in once you just solve a couple problems and people can leverage it in an easy way, the whole ecosystem is just going to go gangbusters. Just something as simple as, I want to have a gallery show of all of the things in somebody's wallet. Well, like, you know, only one service needs to solve that problem, like indexing all the chains and showing that code widget. Like we're going to build one, but like we may not be the winner of that, but who cares? Like we know that's not our mission. We just want people to build apps. And yeah, so like, you know, now anybody can have this no code widget or anybody

can have like this react component where you just give it a wallet address and like you, you have the list now, right? Like how many more people can build applications now that they don't have to spin up a database to index all of the content that's happening in the chain. Right? Like you've taken a whole piece of infrastructure and a lot of work that people used to have to do.

So it's not just about like, okay, great. We all get to leverage the same data layer. It's like, no, we, we also as developers get to solve problems that like are on that data

layer once and everybody gets to leverage that. And we see a lot of applications like doing, you know, comparable experiences. It seems like if and when browsers themselves have the wallets built in, that would be way better than this whole MetaMask load and extension. I mean, I'm a a nerd i don't want meta mask running in my browser i just don't you know i mean it's it's a fine thing to run i'm not against it like i don't have a reason not to i'm just like nah rather not i'd rather go use a different website you know i think one of the scary things about the wallet stuff it really

has nothing to do with the technology and even the setting of it up it's just the idea that like if i lose this like i lose everything right it's that feeling, how do I back this up? And like, am I really printing out this thing and putting it in a safe? Like, is that happening? How do I quickly just get this on a lot of devices so that I never lose it? Did you commit your 12 words or whatever they are to memory in case you ever end up traveling the world and being held hostage or something? Or how are you handling your private keys there, Michael? Give us the tips. I am not going to disclose my personal security practices on a podcast. This is the first rule of Fight Club.

You don't talk about your personal security. Just give us the first letter of each word. That's all we want. We don't need them all. Figure out the rest. You know, I remember at work they were saying, you know, like, maybe you don't want to be, you know, super publicly associated with working on this technology. And I was like, okay, this ship has sailed. Like, I'm all ready. You are exposed. Right, right.

Well, you can have multiple wallets, right? Like, you can have your trash wallet. You can, it's just like you have multiple email addresses. Like, the one you sign into the shady sites with, you're not quite sure if they're going to be. And then you have your trash wallet. You can, it's just like you have multiple email addresses. Like the one you shine into the shady sites with, you're not quite sure if they're going to be. And then you have your, your bank password, right?

Like there are certain levels. I may or may not have several layers of security and interaction around this. Then I will not be, we're not going to get anything out of him, Adam. No. Okay. His lock box.

Yeah. So let me ask you this. And I assume the answer is yes. Can you create an NFT for an MP3 file Yeah, yeah, yeah. So let me ask you this and I assume the answer is yes. Can you create an NFT for an MP3 file? Oh yeah, absolutely. That's easy. You want to do one?

You can show us the best practices. You can use nft.storage. When this episode ships, you can take the episode, the MP3 file, put it on NFT storage, set it up as an NFT,

and then we'll see how it works. Because you can show us best practices or a good way of doing it, right? You probably just want to go to one of the sites that do minting, right? And they'll walk you through the whole process. There's a bunch of sites that do this for you. I was hoping to make you do the work. He wants you to do the work, Michael. Yeah, I don't want you to do the work. You don't know me well enough. I'm trying to get you to do this. Delegate, delegate. Come on, you're the enthusiast. Show us how to do it. You're going to want to go to one of these sites. You're not going to want to build this delegate delegate come on you're the enthusiast show us how to do it you're gonna

want to go to one of these sites you're not gonna want to build this by i i know that it is like the developer thing to be like no no i want to code my own thing and make it work no no i want you to code it for us you're not tracking you're not tracking i'm a manager now he's saying no well we've come to an impasse because I also don't write code anymore. So there you go. Yeah, no, but there's a lot of great sites that will mint NFTs for you. You know, everything from Foundation to Rarible and all these different sites. And honestly, like your use case will sort of direct you to the one that makes the most

sense. Like if you're working on an image, for instance, there are places that are doing a really good job and have the whole experience around selling those images. There are some that specialize in things that look like trading cards, and they do card format. What about MP3s? That is a good question. There are a bunch that I've seen that do MP3s.

I don't know which one would be the favored one. I haven't walked through the flow of minting it yet, but there's a few that have been doing it. Yeah. You know, what you said, though, about how it's not so much the value of the thing, the NFT, the value of it to buy it, like it may have some sort of value. But this whole idea that owning that can enable you to have access to other things. That is really the clincher for me to really understand the value of NFT because for a long time they're like, what are you actually owning? What are you actually buying? But in a case where, Jared, since you mentioned it, NFTing MP3s, if we just hypothetically NFT to every single MP3 we ship as a podcast, our fans combined to those, we can contract X NFT abilities of it, like whatever, however you term that, how many ever times you can NFT it, sell it, whatever the term that is.

And, you know, then we can also share maybe the intrinsic value of that back with our guests. So in future sales, not just Jared and I or ChangeLog Media, our company profits or whatever gains from it, but the guests can also take some part in that. There's some shared ownership of this shared collaborative content we create. And then, you know, whatever. And our fan base can buy those and we can do things where it's like an event or something more cool than an event just for people who own changelog.com and of tease. Just example. I like that. It's, it's interesting. So I said earlier that, you know, what we are

already seeing is like the Instagram as an open protocol, but that's actually kind of undersells it, right? Like this is, it's not just photos, it's any digital media. So it's also podcasts, it's also Twitter, it's also blogging. These feeds can have any digital asset that you ever want to associate. I think that the thing that turns it into a podcast is really just having an agreement about the format and the metadata so that we can create a unified experience around everybody doing this. And this is one of the problems that we're you know looking at just kind of coalescing like all of the metadata best practices right so like we can just work together

and figure out like okay what is all the metadata that you care about in a podcast let's spec it somewhere and then you know let's just go off and mint a bunch of these and sell them wow sounds cool let's do it we got a thousand thousand MP3s to give you, Michael. Can you crack it on this? Let's get you cracking on this. Can you get this back to us in like two weeks? And all the money

goes into your wallet and then I do all the work? Is that? No, see, you're the guest. So we're going to give you a third, you know? That's right. We're going to share

some of that with you. Two thirds, one third since there's two of us and there's one of you. We're writing the contract. There we go. Go ahead, Joe. You were taking us somewhere more serious. Well, yeah, the sky really is the limit. I'll follow up with you guys. I mean, Michael's going to follow up. Again, I'm a manager now. I'm going to hand you off to somebody else to actually do the work. That's totally fine with us. I really do. I'm being

totally honest. I really do think that's an interesting way to consider how you can extend value. Because there's obviously value in us producing this podcast and podcasts. There's obviously value in our following, people who follow us or people who pay attention to what we do. And everyone who participates with us in the various podcasts we produce now and will produce in the future. And I think that that's the authenticness of it, I suppose, and the ability to contract and design that contract. And I don't know, it's just, it's kind of interesting. I didn't think I'd come on the show today and understand more deeply NFTs and want to mint any.

Yeah, yeah. I didn't think that was going to happen. I think, you know, once you start doing this by default, right? Like once this is kind of part of your regular publishing flow, I think it just leads to very different relationships that you have as a creator, right? To your content and to your fans. And what they think of, you know, buying these when they come out, right? Like some of it might just be like, you know, a hundred bucks because,

hey, I really liked that episode. I just want to show you that I liked that episode. But then the ones that, you know, way back just be like, you know, a hundred bucks because, hey, I really like that episode. I just want to show you that I like that episode. Sure. But then the ones that, you know, way back in the past, you know, people are saying like, oh, wow, this is actually like the first time that somebody talked about this project. Right. I really liked that project. I want to be that NFT, you know, or I want to own that NFT. And then, you know, you get to watch people trade them and you get to kind of see what trends are going on. And also, it encourages you to just create more content because the more that they're out there and being traded, the more money is coming back in. What is it called when an NFT has multiples? So multiple, you know, when you can buy more.

Yeah, you can fractionalize it. A fractionalization. Okay. There's another specification that builds on the NFT specification that talks about how to fractionalize them. And then there's a few people that have actually built secondary protocols on just regular NFT tokens to fractionalize them. And different people are working on that in different ways. I think that it hasn't quite shaken out which one is going to win. If I was going to bet, I'd say ERC-1155 would be the thing that wins.

It's a spec. Wow, that's very specific. That'd be my bet, too. I'm a spec. Wow, that's very specific. They do my bet too. I'm with you on that one, Michael. Yeah, okay. One of the tricky things here, right, is that if you do this really early and you do the thing that doesn't become the popular thing,

then you won't be compatible with all of those experiences in the future. That's what I was just thinking because there's like a permanence aspect to this. And yet it feels like such shifting ground right now. You know, like things are moving and changing compatible with all of those experiences in the future. That's what I was just thinking, because there's a permanence aspect to this, and yet it feels like such shifting ground right now. Things are moving and changing, and we don't know what's going to shake out.

Like you said, you're coalescing formats. Well, in the meantime, I might just get coalesced with my format. Oh, you didn't consider mine? Okay, I guess I'm out here on the island. So somewhat speculative, even in technology choices and stuff. Yeah, yeah. I mean, some stuff, like the metadata file and some of the base properties, those are really well established, and people have already built compatibility around them. So we're looking at just extending all of those for things like podcasts, video, all the other media

types. We just want to figure out what the properties look like, publish the specs so that people mostly fall in line with it. And that part of it is really easy. But when you look at fractionalization, you need to look at that data on chain and be able to you know expose an experience of some sort around that fractionalization that may be different than owning an entire token right and like how does that work right yeah like when i fractionalize a piece of art do i really show that piece of art the same way in everybody's gallery or is there something that says like, like, they're a fractional owner, actually, of that? You get the last 10 minutes, you get the middle 10 minutes, and some of those pieces are the start of the 10 minutes.

Yeah, yeah. They break up in the thirds. Cut you mid-sentence, even. There's a few ways to look at fractionalization, right? Like, one is to say, like, okay, why don't you just do a series of individual NFTs that all have something slightly different with them? Right.

Rather than, you know, relying on the protocol to fractionalize it. You can even have tiers too. Yeah, like I mean, CryptoPunks, right? Like each one is a unique punk, but there's like thousands of them that were all published at the same time. If you think about like publishing a new album, like you can just do cool variant covers

with people, with artists that you like and people will buy the different variant covers, right? You can do this with comic books, right? Like they already do that with comic books. Like to sell each one as an NFT, the value of it's going to skyrocket because there's only one but you can do variant covers when you're doing like a big release i'm excited to see what people do with this because you know the ideas just start flowing and i'm sure and we're just the beginning so i think it's going to get exciting and just

probably weird and zany you know like it's gonna get weirder oh yeah it's already kind of weird oh yeah you're gonna have super that's cool it's gonna be great there's a very much like it's so web it's such the the cool part of the web is just like what people do with this new idea you know yeah one that i saw recently and like i haven't bought one yet because they're like 150 bucks so you can can get an NFT for three emojis. So you line up three emojis together and then you get an NFT for that. So you pick your three. Yeah, yeah.

And no one else can do those three or anybody can? You're the only person that's ever going to get those three because the way that they- Oh, I got to get to work. Yeah, but they're like 150 bucks a piece. So like, you know, you got to be picky. Oh yeah, that's too much. But you can imagine something like that.

Like if that really took off, that could be something like a Gravatar service, right? Where like, you know, those are really showing up next to people's profiles as like, you know, them. It's like your signature. Yeah, this is their emoji signature, right? Right. Can you negotiate?

Can you be like, I'll give you a 75 bucks for it. I believe the site is standardized on that for the base price of them. Okay. I think that any that people have already minted though are probably in the secondary market going from ordinate so i love the idea of a secondary market for everything emoji there's a secondary market for everything now is the i'm gonna come up with a new idea it's

called for emoji.com i gotta new one, 5-Minute Abs. I'll do 3-Minute Abs. Exactly. Nobody's going to get that reference, but I love that you put that in. Well, we're just trying to crank up the value of this NFT on this episode. I don't think, like, people younger

than 35 maybe have not seen something about Mary. It was like, if you were the right age in that year, you saw it. But it's not something that people really go back to. Most of my references fall dead on the ears, especially on JS Party. Even all the panelists, they're always like, what are you talking about? I'm like, you had to be there, I guess. You have to be in your late 30s to get it, or older.

So I'm glad you're here, Michael. And Adam, of course. Him and I are right in the same wheelhouse. That's right. Well, anything else we didn't cover? Yeah. I mean, do we do it justice? Is there anything that we missed? Yeah. Yeah. I feel like we got into everything. Awesome. The only piece that I think is maybe missing is people's concerns around climate change and around the energy use and that kind of thing. Like this, non-valuable piece of art sold for X, but it actually costs X in energy and what the state of the world is in. So, I mean, first of all, coming back to that,

differentiating between problems that are current technical limitations versus things that we actually have an incentive to solve. Everyone has an incentive to reduce the energy consumption. It is only a cost center. And if you look at what's happening broadly in blockchains, we've figured out how to get the energy cost down. Those algorithms exist. They're implemented in several chains.

Ethereum is planning on moving to one of them. So Ethereum will be on one of these that uses significantly less energy. It is totally unclear to me how and when Bitcoin would ever do something like this. So Bitcoin may be just always using this much energy. And maybe that's, you know, the downfall of the protocol. Maybe that's why people stop using it at some point, right? If they can't make that migration. But I think if you're looking at the ecosystem overall and the technology overall, we're already moving past that particular problem and we're getting the energy

consumption much closer to just what you use in cloud computing and mobile and stuff like that. You know, I mean, I don't know when your first computer was, but like mine had a power supply, the size of about 20 iPhones and it consumed about as much power, I think as 20 iPhones maybe for a fraction of the compute. Right. And you know, that, that went down and this is all just kind of coming down over time. Glad I saved that for the end then. Because that's the less fun part of it.

I mean, it's important to talk about that though, but I think that's why maybe it gets paid the least amount of attention paid to it because it's just not the fun part. Like developers want to develop, not talk about energy consumption, except for maybe as you correlate your battery pack size to your compute power of your computer to the battery power, like you mentioned, your first computer, for example. You know, that's kind of interesting to think about.

But generally, I'm like, plug it in. Does it work? OK, cool. Let me work. Yeah, I mean, and if you're just worried about, you know, your actions potentially contributing to this problem, which I think a lot of people are worried about. Don't use Bitcoin and pick a chain that's already on proof of stake. If you pick a chain that's already on proof of stake, it's already low power consumption. What's proof of stake?

Rather than proof of work, which is proof of this nonsense compute operation, it's proof of your stake in the network, essentially. I won't get into the details of what stake means, because it tends to mean something slightly different in different chains. It's fungible. Like, you know, what that means in different contexts in different chains kind of varies.

So I wouldn't want to get really, really specific about that. But the NIR protocol is on a proof of stake. Flow is on a proof of stake. Ethereum is moving to proof of stake. Gotcha. It's been a fun journey. Yeah. NFT land.

Hey, check the MMP3s out in the near future. You might have some fun experiences and NFT action for you listeners. Follow Michael on Twitter for when he announces our new NFT. That's one you worked on. Yeah, yeah, yeah. I don't tweet much, so that would be one of the few tweets that would be. Perfect. And then we'll sell your tweet as well.

That's right. There you go. There you go. That's how you really make that make that eat oh yeah well i'll have to get a share of that tweet i think exactly divide that out nice we'll write in the contract don't worry okay you read the contract didn't you appreciate you michael thanks for sharing this uh this journey down to nft land it is a fun trip thank you yeah awesome yeah it's a great time that's it for this episode of the change well thanks for tuning in if you aren't subscribed And it is a fun trip. Thank you. Yeah, awesome. Yeah, it's a great time. That's it for this episode of The Change Law. Thanks for tuning in.

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