Translating Web3 from 26th Century Saturn into 21st Century Earth: NFTs

Part 3 of Bloom’s 4-part series that breaks down the major concepts of web3 in a way that non-technical people can understand.

NFTs

Nope they’re not just a jpg. NFT’s are art objects that can be used as legal contracts, member cards, and public grant reports.

An NFT (nevermind what it stands for just yet) is like a baseball card or other collectible item. If there are a small number of them that exist, and enough people who think they’re valuable, that card can be worth millions of dollars. It might be a Pokemon card with amazing art on it, or it might be a humdrum boring stamp that just happens to be very rare.

“Wait but how is a digital art piece unique? You can just take a screenshot or download it and put copies of it anywhere.” Yes, the visual appearance of an NFT is literally just a JPG or a gif or whatever. However, the visual is only one part of what an NFT actually is.

Now it’s time to explain what N F T stands for. And I’m sorry, because it’s annoying. It stands for Non Fungible Token. You know what non means, and you have a bit of a sense of what a token is and that with blockchain it can hold a lot of programmed information. So what does fungible mean? Paper money is fungible — this dollar bill is worth the same as any other dollar bill, for the most part. Non fungible is a 26th century-sounding word that just means unique, and uniquely valuable. With an NFT, this has to do with all the other information that is part of an NFT, in addition to its visual, that makes it unique.

Most NFT’s, in addition to the image you see on your screen of the NFT, also has data attached to it, called “metadata,” that is stored in a specific format. That metadata has information on the rarity of the object (one common type of NFT uses “generative” art to combine different elements, like what kind of jacket it’s wearing, if the figure has glasses, or how many branches a tree has, into a unique visual. The more rare the combination of elements is, the higher its value. I personally don’t like the art on most generative NFT’s, but most NFT projects are that).

There are a million things you can do with an NFT because of that metadata, in addition to art. They can hold complex contracts like fractional ownership of a real estate property, or even fancy finance instruments like a donor-advised fund. (God no wonder finance has so many gatekeepers, these terms suck, I’m sorry, I’m trying.). One of Bloom’s partners is Kolektivo. They are using an NFT to upload environmental improvement measurement data over time that a local community has done. That metadata is used as a record to mint money (specifically, a local currency) for the people who contributed to those improvements. They can use that local currency to pay their phone bill and buy local food. That anecdote is probably still not plain-speak enough, but I hope it sparks your interest as to why so many people are spending time developing these technologies. We should do a whole article on NFT’s because there are soooooo many things you can do with them.

There are three main uses of NFT’s that we are interested in at Bloom Network right now:

One is art — nearly everyone in our community is a creative, and we think there is a decent chance we can sell NFT’s made by various artists in our community, to raise significant capital for on-the-ground community care projects like community-owned farms or better forms of justice that don’t involve putting people in prison and ruining their family’s life even more.

The second is what is called a membership NFT. NFT’s are owned or “held by” by your cryptocurrency address. (Think of your cryptocurrency address a little bit like a purse — it’s more like that than it is like a bank account, including that it is somewhat vulnerable to theft. We’ll teach you more about security over time.) A computer program can read the blockchain to see if you hold a particular NFT, and if you do, it will give you access to log in to a members-only website, or permission to vote in a community over its governance or spending of its resources. This concept of using a token to access a community is called “token-gating”.

It’s basically just an access pass, or like Patreon where you need to subscribe to access members-only content. Additionally, token gating allows for sophisticated practices, such as giving certain people in an organization an NFT once they have demonstrated certain levels of knowledge and responsibility, which gives them access to governing resources and making decisions for things that need an informed, trustable person to do them.

“Why can’t you just keep track of if I paid my membership dues in a database?” Here’s one of the other major underlying principles of web3. It’s open by default. Some other collective can see if you have a membership to Bloom, and they can give you governance rights in their project because they trust you to be an informed decision maker.

(There is also a whole concept of “badges” and “credentials” in blockchain communities that people are working on. For example, instead of academic credentials being kept as certificates with specific colleges, or certain skill credentials being impossible to verify unless you know the person or get a really good direct referral, open credential standards can make these skills more verifiable across different platforms and communities, and standards better enforced. Remember what I said a while back about diversity of people having access to governing resources? This applies to credentials, too. Universities no longer have a monopoly on stamping approval that you have learned skills or knowledge to do your job well. Indigenous communities can create their own credentials for Native-made handicrafts, so they have an economic leg-up over fashion houses that pirate their designs and use sweatshop labor and toxic dyes to make them on clothes. I digress.)

The third interest Bloom Network has in NFT’s (art objects that can hold contractual data) is impact certifications. These help people record their contributions to local climate and social repair work, in a way that is widely visible to sources of funding. This helps them start to receive compensation for work that by and large across the globe is not included in “the” economy.

Today, most grassroots, community-led climate projects are impossible to fund because they’re too small and decentralized for a funding institution to be able to make time to vet them. Meanwhile, they’re the most cost-effective and fastest approaches. But, if we bundle our impact data up into the level of a local DAO (a DAO is basically a cooperative that uses blockchain for operational transparency) — we can collectively make ourselves visible to granting institutions, to get the initial influx of capital we need to prop up local regenerative economies that are carbon negative and more equitable. Bloom Network is already known for our depth of impact on ecological and cultural levels, and we are respected by communities who have financial resources. As long as we maintain trustful local verification and documentation of what’s happening among the Local Bloom coalitions on the ground, we will be able to help bridge this gap for funders vetting many small projects which together make a mighty force for transformation. If I went full on web3 bro speak right now I would say we are a mimetic aggregator. (I hate tech bro speak as much as you do. It’s why I haven’t been able to fully finance Bloom Network yet — that way of talking drives me up the wall, and over it, and away from whoever is talking like that. We are slowly attracting people who can translate our matriarchal way of working into the formats and language that granting bodies want to read.)

Continue to Part 4: Public Goods Funding →

Author: Magenta Ceiba
Principal Systems Architect
Stay connected: bloomnetwork.earth