Image source @ Visual China
Text | Finance has edges
A pair of socks was auctioned for $120,000, a video of an NBA star dunk was auctioned off for $208,000, a 5-word Twitter was auctioned for $2.5 million, a jpg image spliced together from 5,000 pictures was auctioned for $69.34 million, a 9,555-line World Wide Web source code was $5.4 million, and now even fruit sister Katy Perry and Twitter have to get involved.
And the "magical" scene that created all this, not to mention you guessed it - NFT. It also has one of the most well-known nicknames: digital artwork.
Different from the interchangeability and substitution of Bitcoin, NFT is irreplaceable and irreplaceable, which also determines the uniqueness and scarcity of NFT, and determines that it is not suitable for high-frequency trading. The NFT Industry Development Report 2021Q1 shows that collectibles and artworks together account for 91% of the NFT market.
Why NFTs can first land in the field of traditional art, this has to start from the limitations of traditional art.
<h2>NFTs leave counterfeits without hiding</h2>
Leonardo da Vinci's painting The Savior, once considered the work of his disciples, was auctioned for £45. It was not until the third auction, when the team of experts used infrared reflection imaging technology to find that Jesus' thumb in the painting had traces of modifications — there would be no traces of modification in the imitation, only the original manuscript would have, and it was determined that the painting was da Vinci's original.
The painting's price soared, eventually fetching $450.3 million at the fifth auction.
(The left is the real shot of the painting, and the right is the infrared reflection imaging)
This is also the current situation faced by traditional artworks, which has long been plagued by the problem of counterfeiting. Statistics show that the art counterfeiting market is worth as much as $6 billion a year.
In addition, there are several major problems in investing in traditional art: different temperature and humidity environments will affect the physical body of art, and insurance costs, restoration costs, and transportation costs are all costs. Moreover, the entry of traditional works of art is subject to customs duties and value-added tax, so there are many precious works of art that will remain in the warehouses of free ports such as Hong Kong and Switzerland for a long time, and it is difficult for the general public to have the opportunity to receive them.
As a result, the traditional art market is the existence of "Yangchun White Snow", which is basically a game played by "rich people" - small audience, small transaction volume, and poor liquidity.
The emergence of NFTs has greatly changed the trouble of traditional artworks that cannot distinguish between authenticity and falsity. If your work becomes an NFT, it is equivalent to marking your work with a permanent symbol, including who the original author is, how many times it has been sold, and who bought it with, it will be recorded on the blockchain very completely, and it cannot be changed. Even if someone copies an exactly the same NFT, they only need to compare the contract addresses to confirm whether the NFT is real.
To use a very simple analogy, you p a funny meme on the Internet, send it to the group, and then this meme may be spread by countless people, but even if more people use it, few people know who the first person to send this meme is, but once you use blockchain technology, no matter where the meme is transmitted, the other party can easily know who the first person to create this meme is.
This is also where the NFT innovates, in that it provides a way to mark ownership of native digital assets and provides a good idea for the copyright of digital works.
In addition, unlike traditional art, another benefit that NFTs bring to original creators is that original authors can get a share through the secondary sale of NFTs.
It is the uniqueness and circulation of NFTs that make them usher in a boom in development. In addition to more and more creators, trading platforms, and investors showing a high degree of enthusiasm for NFTs, more and more celebrities have also joined NFTs, providing another possibility for the fan economy.
Katy Perry, the pop superstar, is planning to launch her NFT, taking the opportunity to connect with its fans around the world. Ian Summerhead, the male protagonist of the famous American actor "The Vampire Diaries", will collaborate with TOAKU to release a series of NFT works on Bakery Swap to show fans what he is doing through NFT.
In China, there is naturally no shortage of digital artists and enterprises that pay attention to NFTs. In June alone, there were multiple NFT incidents in China.
First of all, crypto artist Song Ting participated in the World Ocean Day Music Public Welfare Special Planning Activity jointly initiated by Tencent Music Entertainment TME and WWF, and created a series of song covers for Zhang Yunlei, Jiao Maiqi, Naiwan and Chen Jingfei, and the four musicians contributed their own photos of the seaside and the ocean photos collected by WWF from volunteers, which were created by Song Ting through the collaboration between people and AI, and uploaded to Tencent's blockchain product "Zhixin Chain" for permanent preservation.
After the NFT skin released by Alipay and Dunhuang Art Academy and the anime "Wu Liu Qi", it will be quickly spaced in seconds on the line. It is exaggerated that on the idle fish second-hand trading platform, a Dunhuang Feitian NFT skin was fried up to 1.5 million yuan, which shows the high heat.
The latest news is that the cooperation between Jay Chou and Sotheby's, which offers NFT auctions, is also considered a signal that he is about to enter the NFT.
The blessing of various celebrity IP, coupled with strong capital support, makes the NFT market become extremely hot, for a time, as if everything can be NFT.
<h2>NFTs are inevitable</h2>
As early as 2012, a person named Yoni Assia wrote a content called "Bitcoin 2.X (aka Colored Bitcoin) – initial specs", which described the idea of Colored Coin (color coin), and then people continued to improve color coins and form the core idea of color coins: if you can mark Bitcoin, And these tokenized bitcoins can be traced, then these special bitcoins can produce many other usages.
Therefore, colored coins are also known as the prototype of NFTs. But because at that time, people's eyes were focused on Bitcoin, and the colored coins were still "talking on paper" in the small circle, and did not "land". Two years later, a financial platform built on the Basis of the Bitcoin blockchain, Counterparty, was founded, and someone on this platform made a trading website for digital works, which formed the earliest model for cryptocurrencies to run on the art market.
But in the years that followed, the NFT didn't "get up" as it wished. It wasn't until 2017 that the explosion of a cloud cat game called CryptoKitties allowed the NFT concept to gain a lot of attention for the first time.
However, NFTs, which have received a lot of attention, have been in a tepid state for the next few years. In the second half of 2020, NFTs began to "warm up". By the first half of this year, NFTs showed explosive growth, with several "sky-high" transactions, making it a hot spot for the public to chase.
On March 11, the NFT work "Everydays: The First 5000 Days" by renowned crypto artist Beeple was sold for $69.34 million by Christie's, the world's top auction house.
On March 7, Twitter CEO Jack Dorsey's first tweet was auctioned for $2.5 million, and the tweet was just five words.
On June 30, Tim Berners-Lee, the "father of the Internet," sold the NFT of the World Wide Web source code for more than $5.4 million.
……
According to incomplete statistics, in March 2021 alone, the transaction size of the NFT market reached $205 million, more than the sum of all previous NFT transactions; by April 2021, the total market value of NFT works in the public chain exceeded $30 billion, a record high; in the extreme market of the cryptocurrency market in May, the transaction volume of NFTs continued to grow.
The catalyst for the NFT outbreak is related to the sudden outbreak last year. History tells us that every time there is a major change in human society, a new art form will be derived. Jason Bailey, founder and digital art expert at the analytics database Artnome, has previously said in an interview that the COVID-19 pandemic is one of the main reasons for accelerating the shift from the center of world culture and influence from the analog world to the digital world.
Second, the maturity and progress of blockchain technology over time are obvious to all, so it can ensure that the ownership of NFTs is not destroyed, and ensure that the records of each transaction are transparent and traceable, and can also prevent counterfeiting to ensure authenticity.
Another important reason, in the context of last year's currency over-issuance, led to a greater concentration of global wealth, and this money needs to have a place to go, and the NFT is one of the places to go. According to the incomplete statistics of Zero One Finance and Zero One Think Tank, since the first half of this year, more than 80 NFT projects around the world have been favored by capital, with a total financing of more than 780 million US dollars. At present, NFTs are widely used in digital artworks, games and other fields.
<h2>Rational treatment is the right solution</h2>
Now pouring cold water on NFTs that are heating up seems to be somewhat pessimistic. But in fact, pessimistic views on NFTs are not in the minority.
Coinbase founder Fred Ehrsam linked the rise of cryptocurrencies to the Internet boom of the 1990s when "90% of NFTs are made could lose value over the next 3 to 5 years and be virtually worthless." This is the same as the situation with early Internet companies in the late 90s. ”
Artist Beeple's digital artwork "Every Day: The First 5,000 Days" sold for a whopping $69.3 million (about 4.5 billion yuan), but he believed in an interview that the price of NFT art is definitely a bubble.
Even cryptocurrency vendors believe that the vast majority of NFTs on the market today will become worthless in just a few years.
This pessimistic thinking is largely due to the fact that, on the one hand, the trend that has caused today's NFT explosions is driven by the hype of some celebrities and cultures themselves, which is suspected of exaggerating the value of NFTs. For example, a pair of socks can be auctioned for $150,000, which is too different from its own value, just because the item is added to the NFT as a cryptographic proof of interest, the price will rise, which in itself is not reasonable.
On the other hand, although the artistic creation formed by the NFT has a unique identity, it is nothing more than that, and it is also fraudulent. In the NFT market, there have been cases of taking other people's works, making their own NFTs and profiting from them.
In addition, it is not denied that as a kind of crypto proof of interest generated by the use of blockchain technology, there is a good effect on strengthening the protection of asset rights and interests and promoting the circulation of transactions, but at present, there is still no clear regulatory authority for NFTs to supervise them, if there is no supervision, the NFT market order is prone to chaos, how to define the property rights of NFTs? For example, the highlight of the big slam dunk, so the property belongs to the basketball player? Who broadcasts the game? Or a video editor? If it was recorded by the audience themselves, did it belong to the athletes or the spectators?
The birth of any new thing has a two-way nature, there is no doubt that with the improvement and progress of blockchain technology, as well as the development of VR, AR and other technologies, the popularity of NFT is more like the inevitable result of digitalization in the context of the digital economy.
It is also its emergence that not only has the potential to make a photo, video, music and text in our lives can become a digital asset, but also conducive to the digital copyright, distribution and transaction of traditional art, etc. From this point of view, the NFT can be called reshaping the form of art collection in the digital age. Therefore, for NFTs that are still exploring, we should hold a normal attitude, and rational treatment is the right solution!