What is the hottest digital technology concept since 2021 after the metaverse? Undoubtedly, it is an NFT (non-homogeneous token), and the popularity continues to this day. On January 23, China ushered in the first auction of the automotive industry NFT, and the Roewe Automobile NFT digital art collection was auctioned at a price of 1 million yuan. Previously, Ali, Tencent, JD.com, Bilibili and other Internet giants have also begun to lay out NFTs, and have launched digital collectible platforms.
The upcoming Winter Olympics have added "a fire" to the NFT, and enterprises such as ANTA and China Sports Industry have successively launched digital collections of the Winter Olympics, and even set off a boom in the A-share market, and the concept of digital collections has ushered in a wave of gains.
It is worth noting that compared with foreign countries that financialize and hype NFT as a token, the domestic attitude towards NFTs is more cautious, mainly focusing on the function of NFTs for copyright protection.
At the same time, experts pointed out that the domestic NFT related institutional links need to be further opened, although the NFT can confirm the rights of digital assets, but the value of digital assets is a problem, and it is necessary to legislate on the intellectual property rights of digital assets.
The NFT market exceeds the scale of 100 billion
NFT, non-homogeneous token (Non-Fungible Token) is a kind of encrypted digital proof of rights and interests that cannot be copied, tampered with, and split on blockchain technology, which maps physical assets such as physical collections and virtual assets such as images, music, and game props. According to the Tianfeng Securities Research Report, the core value of NFT lies in the "digital content assetization", relying on blockchain technology to ensure the uniqueness, authenticity and permanence of digital assets, enhance their liquidity, and effectively solve the problem of confirming the rights of on-chain assets and solve the pain points of copyright protection.
Liao Xuhua, an analyst at Analysys, said that the core value of NFTs lies in the confirmation of rights, that is, to give digital products uniqueness, so that digital products have the same consumption and collection value as physical products, and to solve the value limitations brought about by the reproducibility of digital products.
According to a report by market research agency Qinalysis, the size of the NFT market has reached at least $26.9 billion in 2021, or about 170 billion yuan.
The natural proximity of the Internet cultural and creative industries and NFTs has also prompted many leading Internet companies to lay out NFTs. For example, Alibaba Auction has added a digital art auction channel, Alipay has launched a digital collection release platform "Whale Detective"; Tencent has launched an NFT trading software "Magic Core APP"; JD.com has released an NFT distribution platform "Lingxian"; And Xiaohongshu has also set up an R-Space laboratory for displaying and selling digital collections. Recently, Station B officially entered the NFT and announced the first digital art avatar "Pigeon De".
Station B Digital Art Avatar "Pigeon De"
Alibaba Auction adds a new digital art auction.
At the same time, the novel concept of NFT has attracted a large number of fans and participants to invest. On January 12, Jay Chou's fashion brand PHANTACi sold the NFT project Phanta Bear for the first time, the NFT product was limited to 10,000, the unit price was 0.26 ETH (about 6200 yuan), the total price exceeded 62 million yuan, and it was sold out within 1 hour.
Previously, many NFT digital art collections were auctioned at high prices. For example, crypto artist Beeple's "Everydays - The First 5000 Days" sold more than $69 million at Christie's, while the Twitter co-founders auctioned a 5-word Tweet in the form of NTF, which ended up selling for more than $2.9 million.
"Due to the previous virtual currency is the FT (homogeneous currency) speculation, many people equate NFT and FT, thinking that this is a new speculation currency, in fact, it is not so", Pan Helin, member of the Information and Communication Economy Expert Committee of the Ministry of Industry and Information Technology and executive dean of the Digital Economy Research Institute of Zhongnan University of Economics and Law, said that NFTs are digital assets that confirm the right, which makes digital assets unique and scarce, but uniqueness is not the source of digital asset value, the value of digital assets itself is.
"Due to the excessive speculation of some overseas platforms and some products, a large number of public will associate NFTs with speculation, coin circles, etc.", Liao Xuhua analyzed, on the whole, in foreign markets, the technical characteristics and trading functions of NFTs inevitably become one of the new hot spots of virtual currency speculation, many of which are buyers from the virtual currency market, and the purpose of purchase behavior is greater than the value of the purchase target itself.
The domestic industry focuses on digital collections
In addition to digital artworks, gaming is one of the most compatible areas with NFTs, and many gaming companies regard NFTs as growth points. Last year, Netmarble, Ncsoft, NHN, Kakao Games and many other South Korean game companies publicly announced their intention to enter the NFT.
In foreign countries, the "P2E" (play and earn) nature of NFT games has made many developing countries flock to it. According to a report presented by independent research institute Finder, the lower the per capita income, the higher the penetration of NFT games. The Philippines, Thailand and Malaysia rank among the best in the world with national NFT asset holding rates of 32%, 27% and 24% respectively.
However, the trend of financialization of game NFT functions has also attracted the attention of the South Korean government. In July last year, games with access to the NFT trading system were rejected and rated by the Korean Game Management Commission on the grounds that the game contained NFT features. Last November, South Korean regulators announced a ban on games using NFT apps, saying the new services could fuel a gambling ethos among teenagers, with an official at the South Korean game rating and management department saying, "What we are prohibiting is not blockchain technology, but non-functional NFT apps that can be linked to physical assets." ”
In addition, there are many game developers who are wary of the combination of games and NFTs. According to the 2022 Game Industry Questionnaire Report released by the GDC Game Developers Conference, 70% of developers are not interested in NFTs at all, and 72% are not interested in cryptocurrencies as a payment tool. Only 1% of developers say their studios are already using NFT or cryptocurrency technology.
In the report, there are even game developers who believe that "NFT is a technology that is still looking for a target." People will be interested in it and use it as a gamble to make money, but the public demand for it is not enough to make it an actual currency. ”
A number of domestic Internet companies that have laid out NFTs are also particularly cautious. Platforms such as Ali's Whale Detective and Tencent's Phantom Core do not directly mention NFTs, but instead "digital collections", and all state that they do not encourage any form of digital collection speculation. At the same time, the platforms also impose restrictions on secondary transactions, with similar items being traded on private blockchain networks rather than the usual transactions on Ethereum (ETH) and other well-known protocols.
"The domestic NFT market is relatively rational, mainly collection value, and does not allow transactions and speculation, the core of everyone buying NFTs lies in paying attention to the content value created by creators and the recognition of copyright protection," Liao Xuhua said.
"The appearance of domestic NFTs in the name of digital collections is itself a qualitative rejection of secondary transactions under the requirements of supervision. Without secondary transactions, it is difficult to be hyped into sky-high prices", Internet industry analyst Zhang Shule believes that domestic NFTs are mostly derivatives of a marketing, and even as a "gift" of some large manufacturers.
In October last year, the National Copyright Exchange Center took the lead in issuing the Self-Discipline Convention for the Digital Cultural and Creative Industry, which put forward eleven consensuses on digital collections. Resisting speculation is also an important consensus of the Convention: resolutely resist any form of digital literary creation as a gimmick, substantive issuance and speculation of virtual currency; resolutely resist any form of malicious speculation on the price of digital cultural creations, and prevent speculation and financialization risks.
"Pie" or "Trap"?
"At this stage, domestic enterprises are still in the stage of testing the waters in the NFT field, and they have not thought about 'how to use it'", some insiders revealed to the Nandu reporter that the gap in the regulatory system in the NFT field makes the NFT mixed.
How do you tell the difference between a "pie" or a "trap"? Most professionals believe that paying attention to the artistic value and innovation of NFT works is the best way to avoid risks.
Zhang Shule analyzed that whether it is relying on physical objects or digital NFTs, its real value comes from the artistry or uniqueness of the creation itself, and creativity is where the value lies, not the so-called only. Based on this qualitative, NFT, regardless of the form of expression, is actually a collectible category, and it is often the best to use the traditional collectibles market model to define the pie and trap.
"In the absence of professional art appreciation, do not pay attention to those NFTs whose content is simple but imposes symbolic or abstract meanings," Liao Xuhua believes, "the most important thing is not to speculate for profit."
At the same time, the domestic NFT-related institutional links need to be further opened. Pan and Lin said that although the NFT can confirm the rights of digital assets, the determination of the value of digital assets is a problem, and it is necessary to legislate on the intellectual property rights of digital assets. Although NFTs can make digital assets unique, but can not prevent plagiarism, if someone through the NFT to obtain the property rights of a digital artwork, it will infringe on the interests of the original author. At the same time, it is also necessary to see that there are also costs in the establishment of NFTs, mainly through virtual cryptocurrencies, but domestic cryptocurrencies are blocked from their risk transmission, and NFTs are prone to enter a period of volatility due to cryptocurrencies.
In this regard, Pan and Lin suggested that in domestic NFT transactions, digital yuan can be embedded to avoid virtual currency payment models, and domestic digital yuan can be combined with domestic blockchain platforms to promote the development of NFTs. At the same time, in legislation, it is necessary to confirm the property rights of digital assets.
It is worth noting that the Winter Olympics will become the "window" for the digital yuan pilot. On January 4, the Digital Yuan (pilot version) app launched apple app Store and Android app stores. The digital yuan will be piloted in Shenzhen, Suzhou, Xiong'an, Chengdu, Shanghai, Hainan, Changsha, Xi'an, Qingdao, Dalian and the Winter Olympics scenario (Beijing, Zhangjiakou). According to Chinese Minsheng Bank, in the Beijing division of the Winter Olympic Games, the construction of the digital yuan acceptance environment is accelerating.
In addition, Liao Xuhua also believes that the domestic NFT market also needs to make up for two shortcomings: first, the platform needs to maintain restraint, and enterprises in all links of the industrial chain need to form a cooperation to prevent the proliferation of speculation; second, it is necessary to develop products with a wider audience group so that more people can understand the value of NFTs, so that more creators can benefit and establish a positive cycle.
Written by: Nandu reporter Chen Peijun