– Now to the latest trendthat’s sweeping the internet. – So called NFT. -[ Reporter] They’re nowselling for gargantuan horses. 69 million dollars. – So what’s behind this latest fad? – That is the question to ask. – Okay, so there’s somesuper strange substance happening online right now, and I got to tell you about it. First, look at this tweet. The first tweet ever tweetedin the history of Twitter.The tweet was by Jack Dorsey. – I’m one of the co-founders of Twitter. – And this tweet wassomehow simply purchased for $ 2,915, 835.47. -( laughter) You serious? – And it’s not just a tweet. Time last month a single jpegsold for 69 billion dollars. The NBA is selling littlemoments of basketball games for hundreds of dollars. This is all sorts of digital things that people are purchasinga account of them for lots of money. There are three simple lettersthat you need to understand to understand what’s going on now. Those characters are NFT. – Now to the latest trendthat’s sweeping the internet. – What is exactly is an NFT? – So announced NFT.- Do you all in the chatunderstand what an NFT is? – Does that stand for not safe for production? What does this mean? – Why would you pay for an NFT when you can look at it for free? – Is this a monumental bubblejust waiting to burst? – I believe in this spacewith my whole nerve. – I’m just fascinated by it, all of it. – This story is much bigger than a $600,000 cat gif. Or a three billion dollars tweet.It’s a story about human psychology and how the direction wevalue things is changing because of technology. A technology that some people envisage may change national societies, while at the same timeaccelerating the climate disaster. It’s really nuts, it’s allof these things together and I wanna explain itto you, so let’s do this. Now what the hells an NFT Apparently cryptocurrency Everyone’s meeting some fund -[ Announcer] Oh that was insane officially insane Lebron James. – NFT stands for non fungible sign. Okay, there it is, that’s the reason. Non fungible token, originates impression right? The video’s over now. No, one of my issues with this topic is that people throw aroundthings like blockchain, crypto artistry, record, NFT, and they just expect me to understand what they’re talking about, and I didn’t. Okay, I’m gonna talk abouta Tesla for a second. Customized by Unplugged Performance to be the most unique andhigh quality Tesla there is.Oh and it’s not just a Tesla, it’s also $20,000. You can open for achance to win the Tesla and $20,000 by going toOmaze.com/ JohnnyHarris. When you donate $10 or more, your give goes tosupport two non-profits. 501 C3 is the first one. They are an organization that seeks to mobilize the next generationto fight climate change by creating a global community that embracings low-toned carbon culture. The other one is called Give Power which seeks to give clean drinkable water to the 2.2 billion people various regions of the world who do not have safeaccess to clean-living sea. The non-profit works itsdeep solar expertise to dominance and stipulate cleanwater, meat defence, and daylight to parts around the world. So to potentially prevail a Tesla and $20,000, and to support these organizations going to see Omaze.com/ JohnnyHarristo find out more. So, fungible, let’s talk about the word fungible.It’s this very specific word that economists use, it has a very precise definition. I wanna abuse a different wordfor fungible for a few seconds. Let’s just use the word replaceable. Non-fungible signifies non-replaceable, you can’t supersede it, there’sonly one of them, it’s unique. Non fungible. Let me give you an example of something I feel very strongly about. Let’s say you want tobuy an orange case. This is really absurd, I’ve actually never counted these before. – Stop it, be helped. – You wanna buy an orangejacket from Uni Qlo. You go on the internet, and a cap costs $39. If you are buying one ofthese skins for $39, you don’t care what specificjacket they be transmitted to you, they’re gonna shape thousandsof coats in your sizing, send them to stores, send them to people, and they will send one to you, you don’t care which one it is.The jacket is fungible, it’s replaceable. As long as you get onethat’s identical to the rest, it’s worth the same to you, they’re interchangeable. Nonetheless, let’s talk aboutone Uni Qlo orange skin that has been with mefor a long time. This is the original, and for those of you who don’t know I sort of have a strangeattachment to this jacket. I really adoration it, I adore the hue, I feel like an identity with this thing. And it’s sort of starting to disintegrate, but I adoration it. And I kind of fell in love. This fur is not replaceable. If I went onto the website and paid $39 for a Uni Qlo orange coat that was this precise same simulation, it have not been able to this jacket.This shell is non-fungible. It is the only one onthe planet that exists. It has feelings value. It has important. It is a very valuablething because it is scarce. There is only one of them, it’s valuable to me at least. And I kind of fell in love. Okay, we are able to applied these down for a second. Everything in our economyis one or the other, fungible or non-fungible. A sack or rice is fungible, you just miss a sack of rice, you don’t care which one it is. The Mona Lisa , non-fungible, there’s only one. Unsurprisingly , non-fungible things are room more valuablethan fungible things. To that’s the NF in NFT , non-fungible. Now let’s talk aboutthe T, which is token. This is a highly internet-y word. And to explain this, Ihave to explain something I have avoided explainingfor a long time, the blockchain.Luckily, there’s a way to understand this, and I’m going to make itas painless as possible. Let’s say I want to buythree slices of pizza from my friend Anna. She accuses me six dollarsfor these three slices. I don’t use cash anymore, so I pull out my debit card, my bank card, and I swipe on her little terminal. As soon as I swipe this carda send is sent to my bank and it says hey, Johnny, whohas an account at your bank wants to spend six dollars on pizza, and that coin needs to go to Anna’s bank. This is like the bread andbutter of what a bank does, the working day, they document every transaction that comes in from all their customers, they send out coin to the other banks, and at the end of the day they have a tally of all the money that went out of youraccount and into your history and they can give you a number.They can say based on allof these transactions, “youve had” $ 50 in your bank account. And so when that requestcomes in as I swipe my card my bank is like okay, based on all of your transactions “youve had” $ 50 in your note, I can send six dollarsto Anna’s bank, approved. And they approve the transaction. Once that fund comes into Anna’s bank, Anna’s bank is doing the same thing. They’re like oh cool, she had $ 80 and now she has $ 86, and they contribute it to her record. More and more your money isjust a number on a screen.It’s the result of abunch of transactions. You don’t barter with physical things, you don’t use cash so much better. So the bank stopping thorough the recording of every transactionbecomes really important. We trust the bank to do this correctly. So expressed appreciation for banks. Banks and other centre mortals ought to have remaining stufflike this running smoothly for centuries. I symbolize kind of smoothly. -[ Reporter] The NASDAQ, everything and more has been completely wiped out. -[ Reporter] It was theworst period on Wall st.. – What in the world ishappening on Wall Street? – There have been a few bumps in the road.With the rise of the internet, beings started to wonder. Is there a practice that wecould do this same thing, coordinate this same transaction of transfer of money betweentwo beings without the bank? The upshot is a very cleverconcept called the blockchain. The blockchain. The blockchain fulfills thesame thing the bank was doing, but instead of doing thisprivately on my bank account and talking to Anna’s bank, all of the transactionsare actually recorded publicly on the internet. You’re going surfing on the internet So let’s redo thisexample in a crypto macrocosm. Anna charges me six crypto coppers for my three slivers of pizza. I go to swipe my proverbial bank card to say yes, I want to pay you six silvers. Instead of the bank seeingthat request for a transaction and trying to validate it, it goes on to this public record where a assortment of people’s computers throughout the world are keeping track of every single transactionof everyone ever. If I don’t indeed have thesix silvers in my account to pay Anna, all of the people’s computers who are keeping track ofevery single transaction will notice that there’s a difference. They’ll be like whoa whoa whoa dude, you don’t have six coins.We’re looking at every event ever and you don’t have six coins. Your transaction is rejected. If I do have six coppers, all of the computerslooking at the public record will see that request for a transaction and they’ll be like yep, approved. You have six silvers andnow Anna has six coppers. And they’ll write that transactioninto the public record. Now Anna having those six extra silvers is now the business of everybody, everybody now knows that. The degree here is that the group verifies the legitimacy of every busines by save an attention on every transaction to make sure that it computes up. Okay I’m getting sizzling at this part, so I’m taking off my orange jacket.Okay, so you’re wondering what does the blockchainand this public record have anything to do with cat gifs that sell for $600,000? Well I’m about to tell you. So in my pizza speciman wetalked about blockchain as a direction to verify currency transaction. I compensate you this much, you pay me this much and everybody knows how much everybody has because it’s all public. But this is where it starts to bend my head a little, what if we apply this to something that isn’t money or money? Let’s say one day you’rejust looking at the ledger and the ledger’s like Johnny wants to give Anna six coppers. Okay he’s got six coppers, approved. And then a transaction comes up that’s like a Malaysian businessman wants to give three million dollars worth of coppers to Jack Dorsey in return for a little token, or digital credential that says that the tweet is now somehow owned by the Malaysian businessman.The only thing that theblockchain to be concerned about is does the Malaysian businessman have three million dollars worth of silvers? And so a knot of computersall around the world look at the whole entirelist of deals and say like yeah, this person has more than three million dollarsworth of coppers, approved. They approve the transaction, and now it is written in a public record that is unalterable that says that this Malaysianbusinessman owns this tweet. The token has beentransferred to somebody new , non-fungible token, NFT. And if there’s anythingthat comes human psychology to value something, it’s if an part groupvalidates that it’s real and that there’s only one of them. There are tens of thousandsof NFTs of all kinds. Some music is being given tokens, lots of art is being minted as tokens and being bought and sold, and then of course there’s.- NBA Top Shot. – Who’s taking advantage of this. – These spotlit times, these Top Shot instants fromyour favorite NBA musicians have been turned into non-fungible tokens. – Jesse constructed headlines the other day when he paid $208,000 fora Lebron James Top Shot. – It’s the weirdest thing. As soon as humen have enough abundance to have their basic needs met, nutrient, refuge, cheerfulnes, et cetera, the next frontier is to create value in things that have no inherent ethic. The significance turns into mental publicity. Excitement around a certain thing. We’ve been doing that forever, I make the whole art industry is based on the idea of a bunch of beings deciding that this painting, this little bit ofcanvas and timber and cover is valuable, and thus it is valuable. The only different about now is we now have the technology to do this in a non-physical way using this very sophisticatedinternet technology that is evolving very quickly. Okay, so this is a lot of hype, and I know you’re thinking like cool, there’s a cluster of rich people online buying and trading digital art, and there’s millions ofdollars worth of placards, I thought you said that this was gonna have the potentialto change the world.And I’m getting there, but firstly I need to talk about the crazyflip side to the NFT fad. The reality is that the technology that is the backbone for all of this, the blockchain substance thatwe’ve been talking about relies on the public ledgerthing that I talked about. That is the sort of heartand soul conceptually, but mechanically, like physically what it relies on is computers doing a assortment of little forecasts all day and night forever. These computers aren’t real computers, they don’t have any cache, or screens, or anything. All they do is just makelittle micro-calculations the working day, all nighttime. Most NFTs are stored on ablockchain announced Ethereum.And as of now, in early April2 021 when I’m filming this, the Ethereum blockchain is using 33 terawatt hours of electricity. And you’re like what’s aterawatt hour of energy? That’s the same extent of influence as the country of Serbia. A reminder that produce electricity usually comes from power plants that are burningfossil-fuels, that are putting carbon into the atmosphere which is a big freaking problem. -[ Narrator] Facing a manmadedisaster on a global scale. – The power consumptionof the Ethereum blockchain is exploding, it quadrupledin the like eight months, and it is showing no signal of slows down. It is a lot of energy. And to think that that much energy is not being used tolike, move beings around or raise things, it’s used to crunch numbers in a weird computer depot somewhere so that somebody can buy a forgery token of a thing that we only, oh soldier, I can’t, it’s spirit blowing.It’s such an satirical instant where it’s like this is all digital, it’s all impostor, it’s not real, but it’s having profoundly real world outcomes. I simply wanna finish this video now, talking about what this might mean for our world going forward. This is definitely hype, and that’s the whole point. I represent these speculationmarkets are all about promotion. We see this all the timewith new technologies and brand-new things thatpeople get excited about. And they swarm it with their investments and the cost goes up, and then something happens, for example. – Come on Uncle Phil, this is the’ 90 s man.- What’s a web page, something ducks walk on? – How nice of you to join us. – On equal value, so cashin on today’s new economy. – It’s the’ 90 s, it’s hammer time. – In the’ 90 s the internet was taking off and beings were just realizing that you could make money on the internet. You could determine bigbusinesses on the internet. The stock market wassurging, 400% in five years mainly fueled by so muchhype and commotion around these brand-new internet fellowships. -[ Reporter] Break the recordas America’s longest upturn. – The brand-new economy, is a boom without end? – This rise peaked in March of 2000, and then the bubble abound, and a great deal of thesecompanies either travelled under or completely lost all ofthis excitement valuation that they had.- Saw it didn’t you, it was down some. – But, did that mean thatthe internet went away? Did that means that internetbusinesses didn’t come back? No, corporations went onto reshape our world. Right now I think we are probably in that stage of NFTs. It’s promotion, it’s novel, it’s exciting, but what it’s doing isit’s pushing our thoughts to think differently about how we authenticate and check things. If I buy a mansion, there is a whole thick stack of paperworkand a knot of middlemen to make sure that it is very clear who owns the house, and how that money comes assigned from one person to another. It is a nightmare of an experience. If suddenly technologyexisted that took away the centralized middle “mens and” formed business between beings able to be authenticated, verifiable, and much smoother, thatcould change our world.I’m not here to say ifthe bubble’s gonna burst, or whatever, I don’t know. I just know that this is a crazy moment where we’re getting ourheads around a new technology and what it necessitates, and eventually will change. This won’t be crazy, thiswon’t be romance anymore, prices will go down, but the technology thatallowed it all to happen will probably stick around.( soft music ).