NFTs are based on blockchain technology, and like everyone's ID card, each NFT is unique and cannot be easily interchanged with each other. But domestic NFTs are different from those abroad. In China, NFTs are basically named digital collections, which are not unique in themselves, but are sold in limited quantities. Jay Chou's "phantom bear", which is crowned with an NFT gimmick, is a limited edition rather than a "lone product".
Since the beginning of 2022, NFTs have frequently attracted attention. Its appearance is always linked to "high price" and "crazy robbery".
On January 18, on Jay Chou's birthday, the Tide Brand, which he co-founded with his friends, announced the sale of the NFT project Fantasy Bear, limited to 10,000 pieces, all sold in less than an hour, with a total price of more than 62 million yuan.
On January 12, the overseas crypto community was swept away by an Indonesian man's daily selfie NFT series. On January 13, as the heat continued to rise, the series of NFTs reached a floor price of about $3,000 (that is, the lowest price traded).
NFT is the abbreviation of Non-Fungible Token, Chinese translated as "non-homogeneous token", it is based on blockchain technology, its biggest feature is "non-homogenization". Like everyone's ID card, each NFT is unique and cannot be easily interchanged with each other.
This concept, which seems to be only popular in certain circles, has just passed in 2021, and all kinds of things can be cast into NFTs: Jobs's handwritten "job application", The New York Times column, WeChat/QQ avatars, digital art works, music, real estate, Nobel Prize papers, and so on. In addition, domestic and foreign Internet giants have also entered the NFT, such as Ali, Tencent, Facebook, eBay, etc.
This concept, which is associated with blockchain and cryptocurrency technology, has created a wave of "wealth myths" in 2021. Behind these "wealth myths", there are many questions worth pondering. What is technically unique about NFTs? Is it a potential investment or a hype bubble?
"Sky-high" paintings, GIFs, emojis: NFTs that solve the "pain points" of digital art
In the "wealth myth" created by the NFT, the digital artworks that have been auctioned at many "sky-high prices" have always attracted much attention, which has boosted the NFT to continue to go out of the circle. In 2021, there are already 4 crypto artists in the world who are worth hundreds of millions of dollars for their works in the field of NFT.
On March 11, 2021, a digital artist named Beeple sold for $69.34 million (about 450 million yuan) for "Every Day: The First 5,000 Days." Another 10-second animation of his also fetched $6.6 million. In February 2021, a man named Chris Torres sold his Nyan Cat Rainbow Cat GIF to an NFT auction for $580,000.
"Every Day, The First 5000 Days" (Image from the Internet)
In addition, there are some memes whose protagonists gain benefit from NFTs. A little boy with a clenched fist went viral, and the photographer of the photo made it an NFT, selling for about $35,000. Another explosive "Disaster Girl" meme, also sold for $500,000, and the income belonged to the girl in the photo.
The photographer of this photo made it an NFT.
"Disaster Girl".
(Image from the Internet)
Why is the NFT concept always "bound" to digital art after many explosions?
In this regard, Zhang Cheng, a professor in the Department of Information Management and Business Intelligence at the School of Management of Fudan University, believes that in the past, physical art was difficult to forge, and the authentic works of well-known artists needed to be identified through physical means. But digital art such as pictures, photography, and animation has no substance and is easily available by copying and pasting.
Now, the unique characteristics of NFTs have brought a broad space to the digital art collection market. First, it gives digital artworks "anti-counterfeiting" features. As long as a digital artwork is given a unique code and the artwork is "cast" into an NFT, it is certified as "genuine". The person who buys this NFT can get the common certification of the entire blockchain and have ownership and use of the work.
In addition, Zhang Cheng analyzed that NFTs also give artworks a more free way of dissemination, allowing them to be more widely disseminated under the protection of copyright. When it becomes an NFT, others can still download, copy and paste, but they can't change the code behind it, and each work has only one collector.
Liu Xingliang, president of the DCCI Internet Research Institute and Internet expert, believes that the future of NFTs will become more and more diverse, and the current transactions are mostly art, because offline art transactions are very mature, and many works of art do not have a standardized pricing, so there is room for speculation.
What is unique about technology? Understand the NFT from the traditional seal culture of China
In Zhang Cheng's view, the concept of NFT is actually not new, especially its uniqueness, which has been similarly presented in the history of the mainland. "In China's traditional seal culture, the ancients used to leave seals after appreciating calligraphy and painting artworks, and the seals of generations of emperors and famous masters left in each work gradually formed today's standards for the identification of calligraphy and paintings, which is similar to the concept of NFT artworks now."
For the NFT technology itself, Zhang Cheng believes that "in fact, it has long been realized in technology." "In the 90s, digital signature technology emerged and was widely used to solve copyright problems in software products. One of the most well-known is the MD5 algorithm, according to the source file, to generate a unique and irreversible identification code, no matter how long this code, will form a unique correspondence with a 128-bit or 256-bit number, this identification code is the verification credentials. Once the source file is modified, the MD5 code of the file downloaded by the user cannot match the check digit.
Compared with "digital signature" technology, NFTs are based on blockchain technology, and their unique feature is anti-counterfeiting under distributed systems. NFTs using blockchain technology have decentralized features, and their true and false information is recorded in each node of the blockchain, rather than concentrated in the same node.
It is worth noting that the domestic NFT is different from that abroad. In China, NFTs are basically named digital collections, which are not unique in themselves, but are sold in limited quantities. For example, Tencent's magic core platform, Ali's whale probe platform, etc., rely on the alliance chain of each company for sale, and cannot be traded on the public chain. Foreign NFTs mostly rely on ethereum and other public chains, with unique characteristics, and transactions and speculation are also frequent.
The risk behind NFTs: Is it a potential investment, or a hype bubble?
For NFTs, the voice of doubt never stopped. There are fears that NFTs will eventually become a game for the wealthy, like art collecting, and there are also those who believe that ordinary people can participate in it. Some people think that NFTs are a "Ponzi scheme", and later people pay for the first people to come, until finally no one joins the scam and collapses. There is also optimism that NFTs are a promising way to invest.
Is NFT a potential investment, or a hype bubble? Liu Xingliang believes that there are both. "There is no problem with the trading model of the NFT itself, but there are some people who "cut leeks" behavior, and the purchase of NFTs is similar to stock speculation, which should be treated rationally. "At present, there are a considerable number of NFT project issuers that are not transparent, and the issuance threshold is low, as for who the project party is, where the registration is, etc., it seems that few investors care." In this way, once someone wants to "cut the leek", there may be a risk of accumulating wealth and running away. He believes that there are now a variety of concept stocks such as 5G, medical, epidemic concept stocks, etc., which are themselves a hot behavior, and with the concept, there is speculation value. Similarly, the NFT concept has the same hype value. But separated from speculative speculation, the prospects for NFTs guided by the correct technical path are promising.
In the face of NFTs, Zhang Cheng believes that we must not "buy and return the pearls". "NFT is like Apple has a beautiful packaging, it can help Apple sell better, but also to achieve digital copyright protection." However, if you only see this beautiful shell when you buy it, and do not understand the real value of the apple (artwork) wrapped in it, it is to buy the pearl. ”
Written by: Nandu reporter Yan Zhaoxin