Achilles’ heel of domestic NFT

It’s a long overdue trend, but the number of domestic NFT teams has recently become larger and larger. After Ali’s Alipay and Dunhuang Fine Arts Research Institute and the animation “Assassin Wu 67” jointly launched the “NFT” version of the payment code skin based on AntChain, last month, Tencent PCG’s NFT trading software “Magic Core” APP It is officially launched, and 300 pieces of “Sound “Thirteen Invitations” Digital Art Collection NFT” will be sold for the first time.

On September 6th, even the film magazine “Watching Movies” turned their well-known “Midnight Show” magazine cover into an NFT for sale. On almost the same day, the film director Wong Kar-wai also launched his first film NFT “In the Mood for Love-A Moment”, which will be launched in Sotheby’s Hong Kong autumn auction on October 9. The specific content is an undisclosed plot fragment from the first day of filming in “In the Mood for Love”. Only one version has been released, and the NFT duration is 1 minute and 31 seconds.

Achilles' heel of domestic NFT

Screenshot of the trailer of “In the Mood for Love-A Moment”

Obviously, after “Meta Universe” suddenly became a popular concept and capital darling on a global scale, NFT, which is regarded as an important part of virtual content trading, has once again caught a ride after Bitcoin’s skyrocketing. However, the domestic situation is somewhat different, because both the holding and use of virtual currency are in fact banned. As a result, most domestic NFT products are wrapped in copyright protection, cultural and creative products, digital collections, etc., and Most of them use platform private chain and legal currency settlement.

Behind a carnival is more like a fear of missing the outlet, and those who bought an Alipay skin or Xu Zhiyuan’s quotations for tens or hundreds of dollars may originally thought that they would earn as soon as they bought them, but they have read the user agreement. Only then will I find that there is actually no ownership, let alone the value of resale. Regarding the cut leek, the vast majority of ordinary users in China are indeed late but never absent.

NFT solves digital art problems and is also full of speculative interest

What exactly is NFT (Non Fungible Token)?

As a digital technology, blockchain has actually been discussed for a long time on the application of new media art, but it was not until the second half of last year, with the Bitcoin boom, that this topic attracted real attention.

Compared with homogenized tokens, NFT uses blockchain decentralization technology, a digital artwork that now exists, whether it is a picture, a moving picture, a video, a song or a social media post In fact, it is not equal to NFT. But the seller needs to block it, create a “copy”, record it on the ledger of this blockchain, and become a contract. The contract that exists on the blockchain is the “ontology” of NFT.

The process of creating NFT is actually a process of storing and permanently recording a digital thing that exists on the blockchain, and it is also vividly called mint (casting).

NFT makes what was originally called a virtual and digital product a virtual asset that can be owned, preserved, and traced forever.

Achilles' heel of domestic NFT

NFT “originator” – sold 4200 Ethernet Square of CryptoPunk

The decentralized nature of the blockchain allows NFT owners to not rely on any authority that may disappear or change someday. If explained in the context of the contemporary art market, NFT allows works to be freely resold in the secondary market without verification by any gallery or even the artist himself. More importantly, there is no need to worry about authenticity, because everything Transaction records are recorded on the chain, and anyone can view it.

The auction company Christie’s just concluded its first NFT art auction on March 11 this year. The NFT work “EVERYDAYS: THE FIRST 5000 DAYS” by the digital artist Beeple from South Carolina, USA broke the record in the auction and became a living artist. The third most expensive work. The founder of Twitter, Jack Dorsey, also put his first tweet on the NFT market Valuables for auction. The final bid so far is 1,630.58 ether , or about $2.9 million.

For digital art works, the biggest problem with no transaction value for a long time in the past is how to prove their ownership, in other words, like physical works of art, who will verify their authenticity.

And this is where the true value of NFT lies. To a certain extent, blockchain technology can be used to solve a series of problems of digital art from production, transaction to storage. Even if the nature of “unlimited copy” and random use still cannot be changed, NFT The emergence of at least solved the problem of ownership. In this way, the rising digital art truly generates a corresponding trading market, so that relevant artists can benefit from it.

John Crain, the founder of the SuperRare NFT platform, said that many digital artists’ creations are not suitable for traditional contemporary art business models. They have never been to the Basel Fair, but are very active in the GIF community. In the past, this group had no way to commercialize their creations, and could only develop sporadic commercial activities such as selling graphic T-shirts on the Internet. Nowadays, through NFT technology and the inflow of hot money from the market, more creative energy will be driven to focus on digital art creation suitable for NFT technology, thereby improving the overall quality of this field.

The current NFT boom has also caused a lot of controversy. Of course, the first to bear the brunt is a lot of sensational high-priced purchases . For example, recently NBA star Curry bought an NFT as an avatar for $180,000, and the well-known currency speculator Justin Sun also It is bound to be absent, claiming to have spent $10.5 million to take an NFT cyberpunk profile picture. But in fact, the NFT market set a 30-day sales record of $325 billion in May this year, but it gradually cooled down since the craze for NFTs was also directly linked to the price of virtual currencies.

Achilles' heel of domestic NFT

Curry bought 55 new avatars for Ethereum (approximately $180,000)

Although credit cards like NiftyGateway and NBA Topshot can currently be used, most NFT platforms currently only accept Ether; in addition, the price of virtual currency fluctuates too much. For the same NFT of Ether, someone’s actual holding cost is 200. For the US dollar, some people may enter the market at a high price. US$1500 or even US$3000 are possible. Therefore, early holders have a high degree of advantage, which undoubtedly caused a lot of speculation.

More importantly, although NFT seems to eliminate middlemen in some respects, even if it is called “decentralization”, there is always a trading platform at this stage. Artists need to pay an entrance fee for the first time their works are listed on the platform, and whether the buyer opens a virtual currency wallet or finally takes the work, the trading platform can also receive the corresponding “miner fee”, so himself like Justin Sun The harvesting experts who opened the exchange obviously have strong speculation behind the support of NFT.

Even the creator Beeple, who has benefited from the NFT boom, recently bluntly stated in an interview that the current NFT price is “absolutely” a bubble. Of course, for the foreign NFT market, the current game of drumming and spreading flowers will eventually become rational through the natural correction of the market. After all, in essence, both parties in the transaction have achieved their needs in an open market.

But when NFT is “localized”, the meaning of cutting leeks becomes even stronger.

Can only buy but not sell, domestic NFT has become the platform’s premium game

Just like the rise of the concept of “Meta Universe”, the first companies to set foot in were big companies like Tencent, ByteDance, and iQiyi. Under the NFT boom in the last six months, domestic Internet giants basically did not miss the opportunity to participate.

At the beginning of June, Alipay combined Dunhuang, “Assassin Wu 67” and other IPs to sell 4 “NFT payment code skins” in a limited number. The skin, which was originally priced at 9.9 yuan, was quickly sold at Xianyu at a high price of 1.5 million yuan. In the end, Ali urgently removed all related items from Xianyu and issued a statement that “NFT is not a virtual currency”.

On June 26, NetEase Cultural and Creative’s “Three Three Studio” released NetEase’s first NFT work-the small alpaca three three commemorative gold coin on Taobao. On July 12, the “NARAKAHERO” series of NFT blind boxes authorized by the IP of NetEase’s game “Yong Jiejian” were sold out within 15 minutes of launch.

Achilles' heel of domestic NFT

“NARAKAHERO” NFT series works

During the European Cup in July this year, Ali also instantly generated the NFT digital collection of goals scored by Ronaldo and other stars. It also organized a quiz event and distributed the same digital trophy of the “scoring king” to 1,600 real-name users. In 2016 and the European Cup continued to launch blockchain works.

In addition to launching music NFT, Tencent has also specially developed an APP called Magic Core as its main platform for NFT sales. The 300 “Sound “Thirteen Invitations” Digital Art Collection NFT” were sold through Magic Core.

But a very embarrassing reality is that after the previous wave of Bitcoin hype and the waste of electricity caused by mining, the country has actually banned virtual currency transactions and their hype behavior. This has also led to the fact that domestic NFT products and platforms are almost not internationally accepted in terms of name translation, peer-to-peer transactions, blockchain types and payment methods.

For example, both Tencent and Ali interpret NFT as “digital collections” and “non-homogeneous proof of rights and interests,” and they tacitly hide the word “token/TOKEN” in Non-Fungible Token.

But as the managing director of the Digital Renaissance Foundation, Cao Yin said in an acceptance to the Science and Technology Innovation Board Daily: “I am not optimistic about the NFT digital art market auctioned by Alibaba, because NFT originally represents ownership. A paper certificate was returned, which shows that Ali’s own understanding of NFT is not in place.”

Furthermore , domestic NFT platform services are not so much applied to digital art transactions as they are IP derivatives sales.

At present, the main works are almost all derivative products that each platform cooperates with their respective film, music or sports IPs to launch mass production, and they are just labeled as NFT. However, users can only collect and display after spending money to purchase, and they can neither launch NFT on their own nor even change hands, because the ownership of the works is still on the platform. It can be said that its existence is not as meaningful as the game skins in “Glory of the King”, at least there are some actual ostentation values. As for these NFT content creators, they are basically in a state of disappearance, because Xu Zhiyuan is not actually the creator of the “Thirteen Invitations” digital art collection NFT.

Achilles' heel of domestic NFT

“Thirteen Invitations” Digital Art Collection

Finally, of course, we must return to the level of transaction value.

Most of the overseas NFT products are based on public chains such as Ethereum to build the underlying facilities, so that buyers of these NFT products can quickly transact externally at higher prices. It can attract speculators precisely because there is indeed room for arbitrage trading.

However, in China, almost all the NFT products of major Internet manufacturers cannot conduct secondary transactions, at most they can only be given to friends. Because almost all products do not exist on public blockchains like Ethereum, but private blockchain products launched by companies.

For example, Tencent’s “magic core app” and electronic signature functions use “Zhixin Chain”; Ali’s related products use “Ant Chain”. These are all consortium private chains, not public chains. Therefore, the major domestic NFT platform accounts not only require real-name authentication, but the pricing and payment methods are also legal currencies such as RMB. There is neither anonymity at all, let alone decentralization.

More directly, the NFT works sold by Alibaba and Tencent are actually similar to the limited physical derivatives, and they are still similar to those that can be copied in large quantities at any time. More importantly, the cost of copying is infinitely close to zero. From this perspective, it is completely impossible. Reflects the scarcity and non-replicability of NFT works. Moreover, the purchaser has no ownership rights, only the right to use the digital work in a specific scenario, and cannot own the digital work corresponding to the NFT itself, and cannot use copyright-related commercial purposes. These requirements are said to be a brand new “overlord clause”. For over. If these platforms do not stop that day, then the corresponding digital products will naturally disappear.

Achilles' heel of domestic NFT

NFT work “Every day: the first 5000 days”

Obviously, similar to the position of the meta-universe concept, domestic giants or capital undoubtedly want to take a share of the NFT that has not yet completely dissipated the heat. However, just as the open ecology that Metaverse needs is the reverse scale of the giants, blockchain and virtual currency belong to the gray area in China, and the giants known for the internal cycle ecology are not willing to try “decentralization.” “The practice finally gave birth to the current concept hype of real digital derivatives sales under the name of “NFT”.

Perhaps for the domestic market, the more extensive use of the inherently insufficient NFT is only used in the copyright protection of digital content . After all, no matter what chain it is, it can at least trace the source of copyright as long as it goes up.

But even for this kind of positive effects, platforms still need to be more open, at least to allow more creators to independently own the right to upload works, otherwise, in the final analysis, this will only be a giant hunting through concepts. Of consumers’ games.


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