Ep. 103 Exploring NFTs and Crypto with Professor Cardano
Mike Lynn: Blockchain, Bitcoin, cryptocurrencies, NFTs, digital assets, decentralization, mining, wallets, smart contracts. The list of words added to our lexicon continues to grow at an amazing pace. These words are part of a revolution that stands to change the internet, e- commerce, and in fact, our very society. Today on the show, I sit down with Professor Cardano, co- founder of CNFT. io. He's going to help us understand this world of NFTs. So before we get into the discussion with Professor Cardano, I think it might be interesting to share a statistic. So in 2020, there were$ 100 million traded in NFTs in 2020 alone. That number exploded in 2021 to over$ 22 billion, that's NFTs alone traded in 2021. And the number continues to grow. Now, CNFT. io was a marketplace created the first ever marketplace created for the Cardano Blockchain. That's an interesting piece of information and if you don't understand that yet, just stay tuned. We'll be back to explain more with Professor Cardano. MongoDB World is returning to New York City. MongoDB World 2022: The Future Runs On MongoDB. It's a conference for creators, disruptors, and transformers of tomorrow. You can register today. Head on over to mongodb. com/ world- 2022. Join us from June 7th through the 9th for three days of announcement packed keynotes, hands on workshops, deep dive technical sessions that'll give you the tools you need to build and deploy mission critical applications at scale. We've got a special offer for you folks. There's a discount code, it's podcast. Use the code podcast to get 25% off the currently already discounted rate. Head on over to mongodb. com/ world- 2022. Remember to use the code podcast for your special discount.
Professor Cardano: Hello, my name is Professor Cardano, I'm a founder of CNFT. io, a marketplace that trades NFTs on the Cardano Blockchain. So, CNFT. io was a marketplace that was founded on the fact that NFTs in other blockchains had exploded, and NFTs on Cardano were imminent. It was called the Mary hard fork, and this meant that the metadata was available to be minted on the blockchain as an asset. And we didn't see anyone else in the space talking about a marketplace or really even talking about NFTs for a long while. So in the background, we thought to ourselves," How do we become a utility for people on Cardano to be able to trade NFTs?" And the community really thought that you needed to have a thing called smart contracts, which would be able to manage NFT sales. But we actually created a platform before the smart contract were released, and this basically enabled us to almost act as an escrow for users to trade their NFTs in a centralized way. And obviously this is where Mongo comes in, and we use the chain information and also traditional database to be able to run this escrow service and to trade NFTs across the entire globe. And we launched on the 26th of July, and smart contracts didn't actually come to Cardano until I believe it was around September time. And at this point there was no smart wallet or that connector wallet that was even available. So our website really couldn't talk to any Cardano wallets such as MetaMask if you're on the CADA blockchain. Sorry, the Ethereum blockchain, you might have heard of MetaMask. And obviously we were playing catch up with the other people needed to... The other developers needed to catch up with us and develop out these new features and tools. So we obviously had a major influx of users using the escrow service. The worst thing about an escrow service though was that users would have to manually send their assets. So a customer, for example, would send in a payment for that, like you are on any shop such as Amazon, you'd send in your payment and you'd expect to re receive something back. But we would rely on the seller to send that asset to our customer who has just paid for it. And obviously we collect the payment and we collect the asset and then we usually we'd go through and we would send the asset to the right place, send the ADA or the funds to the right place. And obviously of course, we would take our cause as obviously the business does. And the smart contract basically enables users to automate the process so instead of really having to send it at the end of the process, you're really sending the asset at the beginning of the process. So when you click to list an asset now you're basically just presented with a popup, like I was talking about these smart wallets. You're presented with a popup and we collect all that data and we say," You need to sign this transaction which will basically send your asset into the smart contract." And then the smart contract really is just saying," If we receive, say 100 ADA for your listed asset, we will complete the trade for you and your behalf and we will send the money to you directly." So you don't need to... It could be 3: 00 AM wherever you are in the world and someone could pay for your asset. And that asset would automatically be sent to you with whatever wallet you've used to list it with. There's a few other things as well that we had issues with at the very beginning. And it was more of an educational piece for the wider community and people understanding how blockchains work and how exchanges work such as Coinbase and Binance. And what the issue was is that sometimes people would send ADA or send assets... Oh sorry, they would send the ADA from the exchange directly to a wallet address that we've presented to them. But we would obviously complete the trade because we've received the funds in. Because there's no way to tell that it's come from the exchange, but we would send back the asset to the exchange and obviously these exchanges aren't wallets that are directly connected to the Cardano node or the Cardano blockchain. So when they receive back into the pot of... How would you say? When the asset was received back to the exchange, the asset goes into this big pot of the Abyss where your receiver address isn't really associated to your profile on the exchange. So we had a lot of users who sent assets or paid for assets via exchange and then received their asset as they should do, but obviously they didn't receive their asset into their wallet because the exchanges do not support NFTs. But you may see now that Binance and Coinbase and stuff support NFTs, but they don't actually support Cardano NFTs. They only support Ethereum- based NFTs at the moment. And maybe one day they might support more NFTs. And this is where I think people forget that there's other blockchains out there that have the ability to have NFTs. And when you hear about NFTs in the mainstream media, they're talking directly about Ethereum NFTs, and this is kind of one of our missions as a Cardano- based project is to educate people in the fact that there is other solutions out there and obviously Cardano- based low transaction fees, just to name one of many great features that the blockchain has.
Mike Lynn: So obviously with his experience, he's familiar with many of the terms that we've read in the introduction. Proof- of- stake, proof- of- work, blockchain, all of these things. I asked him to consider that maybe some of the listeners may not be very familiar with even some of the most basic terms and let's provide some definitions.
Professor Cardano: So a blockchain really simply is a bunch of computers or a bunch of nodes that are all connected to one another. And there's different blockchains out there, and obviously you may have heard of some of the biggest ones such as Bitcoin, Ethereum, Cardano, Polkadot, and they're all very similar in nature but they all are actually very different as well. And you may have heard of the term proof- of- stake and proof- of- work. But for example, Bitcoin is proof- of- work and when you mine a Bitcoin, you are solving an equation to receive a block. And a block is of a certain size, and for the effort and power that you put into that equation that you're solving, you will receive back a reward and that's how the Bitcoin blockchain works. For example, on Cardano it's a proof- of- stake. So if you hold ADA, which is the CDA ticker, you are staking it to a stake pool and depending on the level of Cardano you hold, is depending on the reward you receive back. So you don't actually have to do anything, you just stake your ADA and there's a snapshot taken every epoch which is around five days. And what happens is, say, for example, you have 100, 000 ADA in your wallet, you will receive a reward in the next epoch for the entirety of the pool and the effort that the pool has made. So if the pool for example is making transactions or working for the Cardano network, that pool is rewarded and then that pool would in turn is rewarding all of its stakers and that's how the proof- of- stake works. So in the proof- of- stake network, there is all submitted a transaction and basically there's blocks within inside the epoch and the transaction is submitted to the DBC Server, and there's a listener that's looking out for this transaction. And once the blocks received it because the chain can only accept X amount of transactions per block. I believe the numbers around... It's like 257 transactions a second at the moment on average I think Cardano can handle which is quite low for a blockchain or I'd say, and at the moment there is just going off on the side note. There is some congestion on the blockchain right now and it's hurting a lot of people because what I think's happened is they've bought in these smart contracts, and the smart contract being submitted to the transaction is of a larger size than just a normal transaction. So when you are sending these smart contract, for example, on our marketplace, we're obviously doing a lot of volume and then there's other utility on the chain as well, that are also submitting these. So this is where the congestion's coming in. And I know the Cardano blockchain are looking into extending the load and the ability to handle these larger volumes or larger transaction sizes. And obviously when the transaction size is a little bit larger, you have to pay a little bit more of a fee, but it's nowhere near this fee size and you might have heard the term gas fee, we just call that transaction fee on Cardano. And they're very similar, obviously gas fees are maybe about$ 60. On Cardano, it's probably about a dollar depending on the value of Cardano obviously and it could go up and down.
Mike Lynn: So if I get this correct, there's value in the larger number of transactions associated with a stake pool. And in order to get a transaction added to the pool, there's some type of validation done on entry?
Professor Cardano: So when you submit a transaction, it goes directly into the Cardano ecosystem. A pool will be used, or pool slash nodes is probably the right way to look at it. And one of these pools will be used to submit that transaction onto the block, and that's how the reward is paid out. So obviously the more work the node does and stuff then the reward is paid out to that block. And then at the end of each epoch depending on what your percentage of your reward is, you'll get a percentage of all that hard work that the nodes put into it.
Mike Lynn: Okay. So at this point, I'm curious about the valid capabilities of Cardano. In a conventional blockchain like Bitcoin, you have a cryptographic hash that can be solved to a certain degree in order to validate the current transaction. How does that work with Cardano?
Professor Cardano: Yeah. Yeah. So Cardano has similar, they have utility such as CardanoScan or the Cardano Blockchain Explorer, and you are presenting whenever you make a transaction, there is a transaction ID associated to that transaction. So you can validate that transaction has happened. But sometimes for our user base and our use case, I guess, it's because this is maybe an another term that many people might not have heard of but it's a UTXO- based blockchain. And that means it's an unspent transaction blockchain. So what would happen is say, if you needed to spend$ 100 or 100 ADA, you would send 100 ADA in, but on the transaction, you would actually see an input and an output. And what would happen is your input could be 2, 000 ADA because that's the UTXO number but what it looks like has happened is 2, 008 has been sent to the receiver, but then what the receiver does is actually just send back 1, 900 ADA back to your address. And it sounds very really complicated and really odd, and obviously it just works seamlessly when you type that amount in and you send it and a little fee's taken off as well, and then obviously everything just works. But when you really dive deeper into the transaction, you can see how that's worked and how that's split up. And you may also see assets and stuff move back and forth between the transactions. So when you're sending stuff, your ADA is connected to these native assets and for our users is particularly confusing when you're trying to... Like our support team, where they try to debug issues and stuff, the customer finds it quite difficult to understand exactly how we convey that message to them because obviously they can see that transaction come out or that large volume of ADA come out of their wallet and then it returns back in. But it's not as clear as it should be, I guess, in my opinion.
Mike Lynn: Okay. So to bring this into focus in the context of MongoDB, it might be interesting to talk a little bit about the stack and some of the components that go into the infrastructure that make up CNFT. io. Where does MongoDB come into the picture?
Professor Cardano: Yeah, so absolutely, we use a thing called DB Sync, which Cardano uses and that's the whole blockchain from the moment it started. And you obviously sync up these DB Sync servers. And then when we use Mongo on CNFT, we connect Mongo to our DB Sync servers and if a user interacts with the site, you can look at it as a more traditional site where all you are doing is you are listing something for sale. And we are using Mongo to display that information to the user who potentially might buy a listing. But what we're doing is we're pooling the data live from the chain, and then we might be doing some cashing somewhere for example, the images of the NFTs or the videos or whatever they might be. They are hosted on a 99% of the time on IPFS and we pool that from IPFS, the image, so we can display something for the user to actually see and feel and all that data is pooled from the chain as well. And we put that into a listing table on Mongo, and that's how we play the listings on CNFT.
Mike Lynn: So let's continue to break it down. Let's talk about NFTs. What exactly is an NFT?
Professor Cardano: Okay, good question. The way I like to do it is I like to describe it like I'm describing it to my mom and I don't mean that in any way. The way I've described it to her is you take a Pokemon card, for example, like a physical thing, and pretend that image is on the internet and it's on a blockchain, behind that is all the attributes. So let's take Chase Art for example, and it's got flames coming out of his mouth and he's got horns and he's orange, he's got wings. And with inside that metadata which is basically adjacent file, with inside that it's got attributes and it's got a policy ID and an asset ID and this NFT is minted on the blockchain and becomes alive. And really simply the thing that makes it an NFT because it's non- fungible in nature means that there's just one of them, so it's unique. There isn't there isn't another one. And people can see sometimes some NFT projects have the same image on them, but it doesn't necessarily mean that they're not non- fungible because they have a unique asset ID attached to them as well. So it's not just about the image. It's also about the metadata that they lives behind the NFT, or not really behind it but part of the NFT. And that's sometimes what users don't really get to see is exactly what is going on behind the scenes. On the Cardano blockchain we have... When you mint an NFT, you get generated a policy ID and then with inside that policy ID would live all the assets. So obviously the most popular drops are 10, 000 assets. And you could see on CardanoScan, for example.
Mike Lynn: So what do you mean when you say drops? What is a drop?
Professor Cardano: Yeah. So when I mean drops like NFT drops. So people, for example, there's a project called SpaceBudz on Cardano and they have 10, 000 unique little alien characters who they're all different animals so they're SpaceBudz. So they're maybe a lion, a monkey and they're wearing space outfits. And each one of these assets has its own unique attributes, such as x- ray vision or a chess plate or a sword or a life Saver or something along them lines to make them all unique. Even you could drill down all the way down to the color, you could have a purple colored background. And each one of these is unique and SpaceBudz would have its own policy ID. That would be let's say 1, 2, 3 is their policy ID. Obviously it's much, much longer than that. And then with inside that, say, if you have a SpaceBudz, 001, that would have its own asset ID and that lives with inside the policy. And when you explore that on the chain, you are just exploring all the metadata that is associated to that. And then we are just displaying the images and all that good stuff about an NFT and what that is.
Mike Lynn: So I happen to be an artist. I work in acrylics, I create physical works of art. I'm wondering how does one go about minting an NFT from a piece of art? Is this possible? Is this something that can be done? And is it something that is done on CNFT. io?
Professor Cardano: Yeah, of course. I think so to begin with, the hardest part would be to get your physical painted asset that you've made in real life and get into a quality that you could to snap a picture of or whatever. And I can't remember what I was watching but it was a TV show in the UK and it was about validating artwork and stuff. And I remember this same company and basically what they had done is they set up the studio and it's really, really cool. They've got a camera and they take really high def images really closeup of this artwork. And then they merge it all together. So say as like a... I don't know, a massive canvas, they'll take loads of individual pictures and they'll merge it together. And then obviously it'll become a digital piece, like a really high resolution piece. You don't have to have it high resolution of course, you could snap a picture on your phone and crop it and do whatever you like. But obviously for the users, I would really like to have to offer them a really high resolution quality piece, obviously because it wouldn't do your artwork any justice. So once you've got that digital artwork or whatever that might be, there's tools out there that can do the minting process for you. And there's also a more complicated way where you can do it on the CLI and you mint directly to the chain using obviously your Cardano nodes that we spoke about. But there's a project called NFT- MAKER and it's really, really simple. You create a project, you upload an image and you type in all the details that you would like, and you could override the metadata that they have, the metadata on Cardano by the way, just a side note is 721. And that's the standard that the Cardano ecosystem uses. And that way it's easier for everyone in the community to obviously manage this metadata in whatever way. So when you upload your image and your NFT title, the metadata will also contain that image IPFS link that we spoke about. It will also have its title in there as well. And you use this tool and you press mint and you could send it directly to yourself or there's other solutions that you can have. So a thing that we have is a Mint- On- Demand. So what you can do is you can set roles and parameters to say," Send me X ADA, and if you send me X ADA I will send you back a random NFT from this collection. And obviously that's for you to promote and hype up your audience and show them what the artwork and what it is. Obviously, for a unique one of one artwork and not a big drop that we were talking about the SpaceBudz, you'd just obviously upload one and someone could just buy that directly from you, or you could just mint it to your own wallet and that will be your NFT.
Mike Lynn: Okay. Well, thanks for your patience on this. So we start with a physical piece of art. It is digitized, and then the minting process begins. And that's where the digital asset is stored along with a set of metadata. And this is the data that describes the piece of art and possibly its value. And that's where the standard, I think it's the Ethereum standard, 721 comes into play. Do you want to talk a little bit more about that standard?
Professor Cardano: Yeah, so it is technically not the Ethereum standard because it was the Cardano community come up with the naming of 721 obviously taking inspiration from the Ethereum blockchain and they use this 721 to set the standard of the metadata on the Cardano blockchain.
Mike Lynn: Okay. So that describes the standard set of fields that are associated with an NFT in the Cardano blockchain. I think I get that now.
Professor Cardano: Yes, absolutely.
Mike Lynn: What about portability? Is it possible to move an NFT between blockchains? Can I move from Cardano to Ethereum for example?
Professor Cardano: Yes, it is currently there... On Cardano, there isn't a solution where you can move your NFTs to other blockchains because obviously all the things that we've spoke about they're unique to that particular blockchain. So if I was to just take my NFT from Cardano and try and put it on Ethereum, the wallet wouldn't even have a clue what to do with it because technically it's just a native asset associated to the Cardano blockchain. So an Ethereum- based blockchain or an Ethereum- based wallet wouldn't be able to see what this is. It wouldn't even be able to send it to that blockchain. It wouldn't even just... The wallets wouldn't even allow it. So, yeah, it's impossible at the moment. I do believe one day there'll be this interoperability between blockchains and crypto as a whole and NFTs will flow freely. The only issue is obviously cleverer people than me need to work out how stop multiple NFTs becoming three different things on three different blockchains. And how does it live only once in this space? Because obviously NFTs are like a niche within a niche. Crypto's a niche and then you've got NFTs that are a niche in themselves. And then you've got each blockchain which is a niche. So this it's really, really deep. And I think people one day will come up with a solution of how that works or the only other alternative is maybe one blockchain might just win like the VHS BMX battle back in the day.
Mike Lynn: Okay. Let me understand this. An NFT is nothing more than a transaction.
Professor Cardano: Yes, absolutely. Of course. Absolutely. That's all there is. When you mint it, you are just making a transaction on the blockchain and you are admitting this data to that transaction.
Mike Lynn: Okay. I own the NFT. It's a transaction, I can prove that I own that NFT. Where does the concept of the additional utility associated with that NFT come into play and how is that recorded and verified?
Professor Cardano: Of course. I think the biggest utility at the moment, and I guess when you say utility, it means, once you own it, what can you do with it? I guess the biggest thing at the moment, and it's all in the mainstream media is the metaverse. I believe that's where the biggest utility for NFTs will come. Imagine having this really nice artwork that you've picked up on a marketplace or directly from a Drop and you own this asset. But the only way really you can display it is just by sending someone a link. Obviously, my friends say to me sometimes," Well, I can just right click and press save as." But that's not proof of ownership. You don't own that. But imagine when the metaverse is really coming to their own. Imagine having your own land parcel, and then you have your house on your land parcel, and then on your wall, you can put up the NFT that you own with inside your wallet. And you can put that poster on the wall or your NFT on the wall. And then when your friends come around to see you, they can see this NFT. But also to add onto that, the land parcel that your house is actually sat on is also an NFT that proves that you own that land. It gets deeper and deeper. And then other utility could be games, for example. You could have, for example, Call of Duty, obviously all the skins and stuff that they have could be NFTs and you could technically own them and sell them amongst your friends. Because obviously at the moment, if you own a skin on Call of Duty, you can't resell that onto someone, and that's a new marketplace within itself. And then also there would be utilities such as sports event tickets and house deeds, or total deeds. Proof of ownership for things like your car or something like that because it is immutable on the blockchain is really attractive to people. And it just takes these big companies to start adopting and making it really, really easy for the end user to apply NFTs to their everyday life. Because NFTs will not be adopted mainstream if it's hard. And at the moment, there is a learning curve for this. When the learning curve disappears, I believe it's just going to be second nature to people to have a wallet on their mobile device that they could just store NFTs. If you go into a concert, you have your ticket and it's an NFT. If you can't attend that concert, you can just sell the NFT/ ticket to your friends and they know exactly that NFT, because you can verify the policy ID that that ticket is actually genuine and real. You can verify that actually exists and it is a real thing. It's going to really eliminate tickets out and ticket scammers and stuff on Ticketmaster who are trying to resell these tickets. There is so much more to NFTs than just what we are right now, which is just artwork and just images. And we're at the tip of the iceberg right now and we're pushing forward and people are innovating and coming up with really cool ideas of how NFTs can be used in the future.
Mike Lynn: Well, I love looking into the future. Can I ask you to wager a guess? How far out are we from ubiquitous use of NFTs and cryptocurrencies?
Professor Cardano: If I was to guess, I would say it's getting easier for people to do right now and the speed of which we work. I would like to guess three to five years in the very early stages where maybe there's a few people who adopt it such as big companies, maybe like Apple might adopt it. They might adopt it just with something really simple like a proof of ownership of your phone. And then that way the Apple Wallet, for example, would support NFTs directly with inside their whole ecosystem. And then maybe I would say probably 10 years is when governments and countries across the globe start to really adopt NFTs and you use it. Imagine your driving license is your NFT. Your government can just reissue you an NFT. If you get points, you have to just send your NFT back and the government can just update it. You and use a smart contract for that, where the government can obviously add points to your license if you've been a bad driver. And then do all these things that are immutable and good on the blockchain, there's really, really strong use cases for the adoption or mass adoption of NFTs and the blockchain technology that we have.
Mike Lynn: I'm hearing a lot about the metaverse. If I think about it in terms of the way it's described today, it feels a lot like Second Life or World of Warcraft, maybe a little bit more immersive. But maybe what's your take on the metaverse as it exists today.
Professor Cardano: Today, I don't think it's much. On Ethereum, there's a couple of projects called Decentraland and Sandbox and basically people can, I don't know, they can walk around. They can buy clothes, they have their avatar, they can build houses, they can do all this kind of stuff. I think that's the really early stages of the metaverse and Cardano is actually building out a metaverse at the moment and it's called Pavia. I think what will really help is if... Pavia's message from doing some research into them is, they have like an interoperability mindset where they would like to work across all blockchains and across all different features. If you have a house on Decentraland or you have assets in Decentraland, it doesn't matter what metaverse you visit. You can take your house or you can take your avatar and you can go to the Cardano metaverse, which is Pavia. Or you can go to Facebook's metaverse or go to Microsoft metaverse, wherever that might be. But it needs to be a seamless experience for the user and you don't really need to know what blockchain you're working in or what ecosystem you are in. It should just be really seamless and one account fits all really for me. For me personally, the metaverses again, tip of the iceberg, hasn't really evolved into much, but that's why you see these massive acquisitions from Microsoft, for example, buying Blizzards. That is a massive power move, and you can see that they're obviously making this move because they know that the world is going in this direction. Technology is up there and can handle the metaverse, so I'm not too sure. Would I sit at home? Would I come home from work and put on my VR Googles to see my friends and go for a beer? And I don't know, maybe go to the casino and stuff in the metaverse? Or is it a major gimmick? And are we all just going to realize that actually real life is probably better? I couldn't tell you the answer to that. I really couldn't, and I'd love to know the answer. And I'd be really excited to see when I'm a lot older, what people are doing, because I don't think they're going to be walking down the street with VR Googles on. I suspect in maybe there might be a bit of a hybrid metaverse with AR Googles and stuff that say, for example, Google are producing where you have this AR feature that obviously is associated to that and the metaverse is your digital nomad self. And you can pay for things via the metaverse and you can order stuff. You can maybe order a takeaway from a takeaway shop and it actually gets delivered to your house in real life. And that part, the hybrid connection to the real life and the digital life is really critical and key to a success of a metaverse, I believe. I'm excited to have a marketplace with inside the metaverse, where you can walk around a gallery, an art gallery and buy an NFT directly with inside the metaverse. You view it in real life or in your VR Googles, and you just hit buy and then it turns up in your wallet and it's real nice experience.
Mike Lynn: Okay. What else do you think the listeners need to know around NFTs and Cardano?
Professor Cardano: I feel like the Cardano NFTs, for example. Obviously, I'm 100% committed to the Cardano blockchain and ecosystem and the volume that Cardano does isn't the volume that Ethereum does. And there much more room for people to join this space, get involved, develop, come up with really cool ideas and utility to offer the users of Cardano. Because they're crying out for more and more utility, more and more cool ideas, more features to get behind. And there is such a great community I out there that they're willing to invest their time and effort and money into whatever project comes along next. And it's such an exciting space to be involved in and we are only at the beginning.
Mike Lynn: There are some changes coming to the crypto world, specifically around Ethereum. There's a shift that's happening, Ethereum 1 versus 2, and I think it's something around proof- of- stake. You want to talk a little bit about the differences between Cardano and Ethereum and some of the changes that are taking place?
Professor Cardano: Yeah, for sure. With the Ethereum, you're talking about the Ethereum 1 and Ethereum 2. There was this thing called London Hard Fork. People in the community who think that they've split the chain in half and once yeah, so now it's a proof- of- stake and it's a depreciating asset on Ethereum 2. But going back to Cardano, Cardano is a very academic- based blockchain, which has been peer reviewed by a number of excellent people, very clever people. Cardano, I guess I've seen this motto before and it's," Banks the unbanked." They have some really great partnerships with some African countries. For example, they have this thing called a digital ID that uses the blockchain technology for people with inside less fortunate countries that don't have the ability to offer credit or to offer total deeds to houses. Imagine living in a country where you don't actually have a credit score. And we probably take it for granted living in the Western world where you can just go to a bank, you can type in your details and you can apply for credit and you can buy things that you might need all the way up to a house. These developing countries don't have this and the blockchain's come in, it's sustainable. You can use the blockchain and basically this digital ID is such a great idea, because when you are, not when you are born, but when you are of an age, you get this digital ID and say, for example, you get your education that lives in your digital ID. If you go to hospital, all your hospital records live in your digital ID. If you buy a house, your total deeds are attached to your digital ID, because I remember listening to the African Cardano Summit and they were talking about how do you know who owns the house? If someone dies in the village, how do you know who owns that house? And the way they do it at the moment is just ask the oldest person in the village, and what they say is true. But imagine actually having this piece of paper or not piece of paper anymore, this digital ID that you can use to actually authenticate that you own this? The best thing as well is you can authorize connections to your digital ID, and then you can also de authorize them as well. So it's really secure, and you can see exactly who who's connecting to you and who's not. So if, for example, you are applying for a job, you can give your potential employer, the connection to your education, and maybe your job might require you to have a medical. So you can give them access to your medical records. Once you've done all the approving and the checks and say, you are unsuccessful in your job, you could do disconnect that company from your account and all your details still are yours and they live with you. And you have complete control over what you say and do with all that data. And that is really, really powerful, and that's something that the Western world probably doesn't have.
Mike Lynn: What would you say to folks that are concerned about privacy, concerned about committing their private records to a blockchain and the somewhat unproven technology?
Professor Cardano: Well, I feel like having that power to visualize where that data's connected to, and who's connected to you and being able to easily and quickly turn that off. Because once you know that you've turned that off, that data is no longer shared with the end user or the company or the government. Whoever's requested that data will no longer receive that. It's almost like the Google Drive with a shared document. You can see exactly who has access and who doesn't, and you can obviously change the sentence to say," Yeah, you can still view this file, or you can't view this file." And that technology, we don't have in the UK. I wouldn't be able to say to the NHS," You need to cut off my medical records to whatever company might be embedded into that." I don't know who accesses my medical records. I have no, no way of telling. But imagine if I can just log into my phone in a nice app and see exactly who's connected to my medical records and I can remove them from my personal thing, my personal details. It's given me the power back.
Mike Lynn: Interesting. In essence, it's enhanced security through visibility of who actually has access. That's an interesting concept. Now, what about the concept of stolen NFTs or stolen assets?
Professor Cardano: I think there's two ways of that question. The first one is maybe stolen IDs. If you know of NFTs, you probably know of Bored Ape Yacht Club. Bored Ape Yacht Club is a major project on the Ethereum blockchain and it's probably, I would say the most famous NFT collection out there. On Cardano, there has been some attempts of very close inspiration from this project and some people obviously do not support that. I guess what we say to people as a message from the marketplace point of view is," You have the power or the ability to buy the assets. If you like them, you have the power. No one's making you buy these things. No one's making you press that send button and type in then transaction details." The second point to that question, I guess, would be, there has been many copied NFTs stolen because obviously everyone knows that you can right click and press save as and you download that image. That is really obvious, and you can just go through that whole minting process again. But this is where going back to the policy ID and the asset ID is really, really important. The policy ID is there for you to be able to verify that policy can directly connected to the project. And if you can't verify that policy ID is connected to the project, then you know it's a fake. There's companies out there such as Pool. pm, and that's a Cardano blockchain Explorer. And if there is a copy of an NFT, so they suspect it to be a fake NFT because it doesn't match, the name of the asset doesn't match the policy ID that is expecting. Then it will show that. It says," Copy on their asset." On CNFTs marketplace, we actually verify policy IDs manually. And we have a team of people who do that. And it's quite time- consuming, don't get me wrong. But we obviously do that to ensure that our customers are confident in buying a genuine asset associated directly to that project. And we display a little tick symbol, like the Twitter blue tick, we display that tick symbol and you know that you are confident in buying a verified asset.
Mike Lynn: What does that process look like in terms of validation? How are you ensuring that someone's not purchasing a fake or a duplicated piece of art?
Professor Cardano: Absolutely. Our validators, they check. Whenever someone submits a pool request on GitHub, submitting their policy ID, they verify that project to have submitted the policy ID one, isn't a fake. It looks genuine. There's a Twitter account associated to that. They've published their policy ID, their website is live. They actually have artwork that isn't matching any other artwork. Our systems also check to make sure that there isn't a project with the same name as well. So someone couldn't come along and say SpaceBudz, and then also someone else couldn't submit another project with the same policy ID called SpaceBudz as well. Oh, sorry, a different policy ID with the same name. We have all these steps in place. Obviously, it raises a very good point, actually and it's just making me think about cross chain verification. Because at the moment we're in the echo chamber of Cardano and we don't actually check necessarily for a Bored Ape policy ID because obviously the Ethereum blockchain is completely different as we've mentioned this whole way through. So yeah, it's a very good point and maybe that's something that I need to bring up with the validators to just maybe look a bit wider and out and outside of the Cardano space as a whole. So yeah, it is possible that these fake or copycat NFT projects can get through and mint onto the chain. But I think enough people out there are willing to call out these copycat projects. And you will see it on Twitter that when a project comes along, they go hard with the marketing. And then all of a sudden, when someone will do like a Google image search or something. Do you know where you can download the image? You can walk into Google and it just displays that it was a stock image, or it was something, and it's not really owned by that person. And the community are very good at calling people out and stuff. Obviously, that's the marketplace's job, it's us to keep a finger on the pulse and ensure that none of these get through.
Mike Lynn: We covered this really briefly, but can you talk about smart contracts? What's the functionality associated with a smart contract and how do they work?
Professor Cardano: To put it really simply, for with inside the marketplace, we have a smart contract that I guess you could look at as like maybe an if statement. When you go to list an asset, you'll say," I'm going to list it for 100 ADA." And then it will say," If someone pays me 100 ADA for this asset, then I allow this asset to be sent to that user, and I also accept 100 ADA for that." And then obviously with inside the smart contract, it does all the magic. It receives 100 ADA. It also receives the asset, because it's already in the smart contract. And obviously we are in the middle and we are just handling all of that. We take our fee again and we make the swap and we trade it obviously instantly because each step has been confirmed with inside the smart contract. A smart contract also is decentralized in the way that we don't have any effect over the smart contract, and we can't interfere with the smart contract. You have control over that. If you've got something listed, you list it into the smart contract. There isn't anything really we can do with that asset. We can't escape the contract into our own wallet. No one can come along and take that because the way the smart country's written is it's looking for parameters of rules to say, either," If you want to de- list it, it'll go back to your wallet that you sent it from. If you want to sell it, then it'll go to the person who's paid for it, and that ADA will go to the wallet that you listed it with."
Mike Lynn: Okay. I'm starting to picture it. But where do the smart contracts live? Are they in the same document as the NFT? Or are they separate in the blockchain?
Professor Cardano: Smart contract lives separate because the smart contract is, you can look at as its own wallet. When you do set things to the smart contract, so when you interact with the smart contract, you would submit your asset or you would submit something to that. That's how you interact with it. It's not necessarily attached to the NFT, but the smart contract is listening for the NFT to be received into that contract. And then once the criteria or parameter's being fulfilled, that is happy and then it can fulfill its end goal, which is to transfer the asset and transfer the ADA into the right accounts. Basically like a validator. It validates that what you are saying, you are doing is correct and will happen instantaneously. Because why would you want to have anything manual when you can have stuff automated?
Mike Lynn: That sounds a lot like a trigger. Okay. Well, Professor Cardano, thank you so much for joining me today. It's been a great discussion. Is there anything else you'd like to share with the audience?
Professor Cardano: No, thanks for having me. I'm not too sure. If you are looking at getting into NFTs on the Cardano blockchain visit cnft.io. We're on, we have a support account, we have a discord. We have a large community who are willing to support you and help you on this journey.
Mike Lynn: Thank you so much for using MongoDB. Make sure you plan to come back and share those updates with us and the audience. Thanks once again.
Professor Cardano: Thank you.
Mike Lynn: Thanks so much for listening. Be sure to check out cnft. io for your NFT marketplace needs. You can follow Professor Cardano on Twitter @ ProfesCardano,# CNFT. MongoDB World is returning to New York city. Yep. MongoDB World 2022, the future runs on MongoDB. It's a conference for creators, disruptors, and transformers of tomorrow. You can register today. Head on over to mongodb. com/ world- 2022. Join us from June 7th through the 9th for three days of announcement- packed keynotes, hands on workshops, deep dive technical sessions that'll give you the tools you need to build and deploy mission- critical applications at scale. We've got a special offer for you, folks. There's a discount code, it's podcast. Use the code, podcast to get 25% off the currently already rate. Head on over to Mongo, demi. com/ world- 2022. Remember to use the code, podcast for your special discount.
While the crypto market never fails to attract masses of attention, it was Non-Fungible Tokens – or NFTs as we more commonly know them – that exploded into the mainstream in 2021.
From a trading volume of around $100m in 2020, the arrival of celebrities, sportstars, and global brands – creating everything from collectibles and digital art to gaming and assets for the metaverse – drove NFT trading to an estimated $22bn in 2021.
Launched in July 2021, CNFT.IO is a marketplace for NFTs, and the first ever built on the Cardano blockchain. Within just six months of its debut, close to $200m of NFTs had been traded on CNFT.IO, representing 80%+ of all NFTs sold on Cardano, and growing at around $1m per day. As of early 2022, the CNFT.IO marketplace serves 150,000 users, and lists over 1.1 million assets in its catalog.
Professor Cardano sits down with Michael to explore the world of Cryptocurrencies and NFTs.