If he had to spend $60 million on his own real money, I don't think very few people would do that.
Wang Mudi: Today's "Lang Eye" We focus on the hottest word in 2021, NFT. These three letters, which I am only familiar with recently, have not been asked in the past, and 2021 is full of scenery, and was once selected as the annual vocabulary of the Collins Dictionary. What exactly is an NFT?
Fan Di: I study finance, so in layman's terms, NT is gold or currency, and NFTs are assets. It's just that it's in this virtual society of numbers.
Yu Pingkang: NFT, Non-Fungible Tokens, is an irreplaceable credential. It is a piece of code on the blockchain. Blockchain is a decentralized distributed ledger data system, while it has confidentiality. Then the NFT is a fragment, a string of code on this blockchain, because it has uniqueness, transparency, permanent validity, and traceability. Therefore, it can often be easily used as a certificate of ownership of digital assets, substituted, and referred to. This digital asset can be a virtual asset on the blockchain, a painting, a portrait, etc., or it can be a physical asset in the real world corresponding to it.
Wang Mudi: Some people have explained that in the past, we talked about things like Bitcoin and Ethereum, which are called FT, and the difference between FT and NFT is that FT is equivalent to a coin, all the same, homogeneous, and interchangeable. NFTs are equivalent to paper money, which looks pretty much the same, but each has a string of codes.
Lang Xianping: NFT, this new term is really making people cry and laugh. Theoretically, it is a specific asset ownership certificate generated based on blockchain technology. For example, a painting, a bowl of porridge, or a photo can be repriced using blockchain technology. If you're like a painting, you can't cut it in half, it's an indivisible certificate of ownership. Theoretically, any item can be issued with NFTs, so this is a whole new market. One of Beeple's NFTs, called Digital Artwork, fetched $69.34 million at Christie's. He is the founder of an NFT fund. So what I think, is a well-planned hype. In particular, you should pay attention to the fact that in theory, anyone, including you and me, can upload NFTs. But not every NFT is valuable. The biggest question at the moment is that this market is still a regulatory gap. It is not clear whether local governments will regulate securities or virtual currencies. Professor Lang's point of view is very clear, do not engage in this kind of speculation, stay away from this speculative market.
Li Yin: I use a popular phrase to explain what an NFT is. I myself do art collecting, suppose Mudi has a work to sell to me, and then he thinks that selling it to me alone seems to be a bit of a loss, so how do we trade? Generate his work into NFTs, so I bought his work, what did I buy?
NFT We call two words to explain, first, it is a tool, this tool is based on the application layer and the blockchain infrastructure layer between a middleware, it generates a number. This number is unique, but it is confirmed. Teacher Fei, he also likes this work. I change another pixel to generate a new hash value, Teacher Fei has a picture of your work, but there are modifications in it, the pixels are different, and it is unique. So it's called non-homogenization. The second word, in the virtual world, is that NFT is a new productive force that can cause physical assets in the physical world to correspond to virtual assets, because it is not replicable, it is impossible to have homogeneous things.
Yu Pingkang: To use an analogy, this table is a blockchain. There are 4 cups on this, these 4 cups If we just look at this cup, exactly the same, then this is this token, it can be exchanged, your cup is equal to my cup. But if you define this cup as the cup that Wang Mudi touched, this is the only one, and you can't tamper with the code casually, it depends on how you define it.
Wang Mudi: Back to the NFT thing, now pay attention to the fact that everything can be NFT, in the art field, the film and television industry, games, including the recent new meta-universe, many stars NFTs buy land. I have one thing to wonder now, the NFT thing has been there in 2014, why is it hot in 2021?
Fan Di: Assetization requires an underlying technology, which is the blockchain they are talking about. Blockchain creates scarcity and uniqueness. Art trading is anti-counterfeiting in real life, and the transaction cost is very high. But in virtual society, it solves this problem. Therefore, the outbreak of NFT and art has become the first industry. NFTs appeared in 2014, but they haven't exploded until now, because it found a scene that fits right.
Yu Pingkang: I think this is mainly because there is too much "water" in the market and too much currency. In fact, NFTs existed in 1993, when the technology was not yet mature. But in early 2017, it had a small outburst and then went down quickly. Why? The Fed's currency tightened. By this time, monetary policy after the epidemic was extremely loose, and liquidity in the market was flooded. When the money floods, it always finds a weak breakthrough to burst out, which is the NFT.
Fan Di: I have a little different perspective on this. In fact, if you look at the overall transaction of NFTs, it is nothing more than 40 billion US dollars, so it is a drop in the ocean for the huge financial market. So no matter what the currency is, I will have a total transaction volume of 40 billion US dollars. Of the $40 billion in transactions, games account for more than 30 percent and art collections account for more than 30 percent. There are a total of 360,000 buyers, 90% of whom are small buyers, more than 10,000 yuan. So I think there is a result of this monetary quantification, of course, the core is to say that this technology and this development has exploded at this point in time.
Li Yin: There is a very basic reason why it started to be popular last year, which is that everyone has experimented. After testing in 2020, it was found to work. It can solve the problem of determining the right of physical assets in the physical world to map physical assets to the virtual world. In the digital world, we can copy and paste, for example, one Wang Mudi is not enough, come to two Wang Mudi. But with NFTs, it can't be replicated, which means it can only be assetized. Otherwise it can't be unique.
Then the first wave of NFT boom, which began with hype plus entertainment, so why art? Because the trade of natural works of art requires rarity, scarcity, value, and at the same time can be hyped. NFTs cater to or are more suited to its hype.
Yu Pingkang: Because its pricing is vague.
Li Yin: Yes, I collect my own works, for example, my silk scarf is the work of teacher Jin Yucheng, this silk scarf is limited to 500 pieces, I can turn it into an NFT. In fact, the NFT has three stages in art, the first stage is called the era of pre-crypto art, which was directly generated and chained at that time, and it did not have a very direct trade relationship with the crypto world. The second, crypto art 1.0, is some interaction at this time, for example, there is an artist who made a dollar work, he replaced the avatar of the leader in the middle with Satoshi Nakamoto, who has been mapped to the currency of the crypto world; the third is the current stage, we call interactive art. CAAM has a female artist, she makes a dictionary of contemporary art, put 300 words related to contemporary art on this NFT, such as Mudi, you buy her work, her contract stipulates, you can add three words, and so on she published ten thousand times, the word became more than thirty thousand. Everyone's work is different, which is called the crypto art of this era. But back to reality, it is always because works of art can be hyped, plus every artistic breakthrough is related to new technologies and ideas.
Yu Pingkang: So these are essentially bubbles of art. In fact, just now Teacher Li mentioned these very important concepts, which are essentially works of art, a bubble generated in the name of NFT this time. In fact, every time the currency is over-issued, the artwork often has a bubble. The reason why a work of art has a bubble is because of its uniqueness. The second is that its pricing is more imaginary; the third it has room for imagination. In fact, the earliest time I remember before the subprime mortgage crisis, but also when the currency liquidity was extremely abundant, there was a little brother in the United States, he said that there was a URL address, and then corresponded to a screen, then this screen 1024×612 is more than 600,000 pixels, he said auction this pixel, each pixel 1 dollar, then the result within a day he got hundreds of thousands of dollars, in fact, this concept is the same as now.
Fan Di: I have two addendums to this. First, the artwork must have an IP bubble, without IP it is difficult to bubble, you can't say that everyone can do it. Those who have IP art to do this thing can do, some bubbles are okay, but ordinary people don't have to dream about it. If ordinary people speculate, it must be leeks.
Li Yin: Another angle, NFT, it also has the advantage that it can preserve the heritage of human civilization. For example, the first tweet and the first text message in the history of the world were also auctioned on the NFT. Very important reports from The New York Times and the Associated Press have also been on the NFT, and its purpose is to be uniquely preserved for a long time.
Wang Mudi: Now NFTs are not only in the field of art, but also in many fields. For example, Wong Kar-wai's first film, "Fancy Years - Moments", was auctioned for 3.5 million, which is about a plot that was never announced on the day the movie started. Ant Group, Tencent, Byte, Xiaohongshu, and Baidu have all entered the NFT, which is equivalent to forming a new industry ecology.
Yu Pingkang: In the decentralized blockchain world, the beauty of NFTs is that they give everyone the opportunity to hype. There are hype channels, as long as he has talent, as long as he can attract traffic, can launch a new concept, after he creates the work, there is a permanent intellectual property protection. It does not need to go through a centralized trading platform to an auction house or auction market to auction it off. Because if you go to a centralized trading market, these great values are obtained by this auction market. He can trade between peer-to-peer freedoms, so that empowers the average creator.
Fan Di: The industrialization of NFT is the effect of its fission in other industries. There are two reasons from an economic point of view, the first is that I am the value of appreciation, such as real estate, I do a property auction, in fact, I did not spend any money right, but it can bring me other additions. For example, Wong Kar Wai, he didn't spend much money, didn't I have extra income after I finished it? Why don't I do that? So a lot of industries are as a value-added point of view, since you opened me this channel I also do. The second angle is to say that advertising, when I cause an impact on the public and so many people pay attention, I actually don't care about my cost. I care about the effect of advertising. It doesn't matter how much property I sell or how many trams I sell, but I want to create an impact on society.
Yu Pingkang: But you just said that someone auctioned off a work for $60 million and went to buy it. In fact, the essence is also like Teacher Fei said, in fact, he does not have much cost, because he uses Bitcoin or Ether, and he bought this digital currency very early, if he let him spend 60 million US dollars of real money to pay, I think few people will do this.