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Information Scarcity in a Blockchain World

ยท 3 min read
NEST Protocol

With the advent of hype and shrewdly designed traps, blockchain products with no real value are given a vain artificial value. This phenomenon undermines the positive development of the industry; therefore, this article believes everything that does not capture real value on-chain is a desecration of the blockchain!

One particularly valuable aspect of blockchain from an information perspective is that the on-chain world can charge for information and is not dependent on third parties, which is not possible in the traditional off-chain world. Therefore, information being replicated would result in information no longer being scarce and thus unpriced. But in the on-chain decentralized contract - that is, from the perspective of the information users - the ability of replicate the information is constrained. While many emphasize that information from the entire blockchain can be copied off-chain and passed on to the chain in a centralized way, I want to remind you not forget that such contracts cannot build a non-cooperative game: because of the introduction of centralized agents, which is not in the realm of our discussion of decentralized information (no one is stopping you from using the blockchain in a centralized way, there is just little interest in that in our Crypto Native world).

Thus, only on-chain information can be charged in a decentralized way, while off-chain information can only be charged if there is some kind of centralized agent or regulatory guarantee of replication scarcity.

For this reason, the information can also be reflected in the NFT. This paper argues that the difference between NFTs based on static information lies more in the HASH and timestamp. This is essentially just a presence record for off-chain authority or public authentication, without which it would be meaningless. Conversely, NFTs generated with dynamic information are unlikely to be reproduced again by contracts or require higher computational resources, or time costs. Therefore, dynamic NFTs will truly capture value.

The NEST Oracle machine provides a decentralized flow of price information to the on-chain world. Without considering various complex transaction costs and realistic costs, stochastic information based on GBM (Geometric Brownian Motion) or Brownian motion has various properties such as reliable, constant, independent, Markov property, etc. It can even be said to be a time series with the highest information entropy. Using it to design dynamic NFT will reduce a lot of unnecessary processing and is an ideal dynamic stochastic information flow. In the future, the NEST community will also give rise to such NFTs, either as a new art form that never ends and is used without stopping, or as a kind of event library that records the changes of a group, instead of a few meaningless static picture signatures.