NFT, the only and verifiable asset on the blockchain, has always been a hot topic this year, but a common view I got from my conversations with experts is that it has no meaning. This is also a common view in the eyes of mainstream media. For example, news reported by mainstream media is usually news about a certain digital artist selling Jpg (pictures) for millions of dollars. This will make it more difficult for most people to understand what NFT is, because the most immediate reaction after seeing the news is that the NFT market is a big bubble.
And just a week ago, a new star emerged in the NFT market—Loot. Loot topped the sales list with a turnover of over 10,000 ETH within 24 hours after it was launched on the trading market , but many fans in the circle did not understand this. What is the picture with white letters on a black background? Because the white text on a black background is the logo of this project, the project is called TXT (text) in contrast to the NFT project which is nicknamed “JPG”. “The more you don’t understand, the more worth buying, the market goes from JPG to TXT”, someone in the market concluded.
But if someone is willing to spend so much money on these pictures, then it is valuable to someone. I’m sure you’ve seen some news articles. One of the photos is about a super rock sold for 1.3 million dollars and a boring yacht club (Ape Yacht Club) for the same price (400 ETH). Ape, or Visa, bought a copy of “CryptoPunk” for $150,000. The news of these big NFT deals is bringing more and more people to the encryption/blockchain industry, which is exactly the “out-of-circle effect” we hope to see.
In the case of blockchain and cryptocurrency, it is necessary to change the way we hold and manage funds. Some people believe that decentralized finance (DeFi) will be the reason for the large-scale adoption of cryptocurrencies, but it seems that only NFTs can achieve this goal. NFT is not only the sale of Jpg pictures, but also more fun things.
Below I will explain the needs behind the Jpg and TXT image mania, and discuss other uses of NFT.
Before discussing the different ways of using NFT, I want to talk about the crazy growth of OpenSea transaction volume. OpenSea is by far the largest NFT trading market. Since its establishment in 2017, its trading volume has grown exponentially. Last week, its weekly sales reached 1 billion U.S. dollars, and its sales in August alone reached 2.93 billion U.S. dollars. On their website, you can filter the NFT that suits you by art, music, domain name, virtual world, trading card, collectibles, sports, and utility. This just shows the vastness of this market and the potential of unique ownership. They currently have 37 employees to manage all these transactions and are eager to hire more people.
Many NFT projects are launched every day, trying to get a share of Jpg’s story. Most of these projects rely on the community to provide value for them, but there are also many buyers and projects trying to make money quickly. This means that hundreds of projects are zeroed out, and you will end up with overpriced Jpg. Most projects use CryptoPunks as blueprints and publish 10,000 unique images with different characteristics that are usually randomly generated. The rarity of these features varies, providing an index of “luck” for the blind box economy of NFT. The rarer your feature, the more expensive your NFT.
CryptoPunks offered them for free in 2017, but today most holders sell them for 0.04-0.1 ETH (130-320 USD).
After 4 years of precipitation, this series has now become a kind of social status, symbolizing status, cultural convergence, and wealth status.
So why are some pictures so valuable? CryptoPunks is considered the first NFT created in 2017. Therefore, it is not just a pixelated picture, but a history of encryption, a prediction of the direction of the NFT market. CryptoPunks is not actually the first project that many people think, but I think it is the first project of this nature. This is why people look around for these NFTs, and why a picture can have such an outrageous price. This is the beauty of blockchain, there is always evidence of when it was first minted.
While the newer projects currently have different appeals, the two main reasons are influence and community. This is very similar to the expensive clothes that people wear today. Many times these clothes don’t even look good, but everyone knows that they cost a lot of money (Balenciaga shoes). People are willing to spend a lot of money to show off. As the price of these photos increases, becoming a member of these project communities has become more and more sought after. By setting your Twitter avatar or profile picture as an NFT picture, this indicates that either you have been playing NFT very early or that you are rich.
Unique art and music
The NFT market is changing the way artists make money and take care of them in the process. Throughout the history of art, there have been artists auctioning their works. When they became famous, the owners of their works became very wealthy, but the artists had nothing. NFT is changing this. For example, artists can now permanently add a 5% discount to the sale of each piece of art. They can decide the amount, which will be included in the NFT’s can only contract, so no one can object to it. This kind of art can never be forged, because there is irrefutable evidence on the blockchain.
Digital artists are recognized by art institutions for their outstanding works. The auction house Christie’s auctioned a work by the artist Beeple (Mike Winkelmann) for US$69,346,250. Beeple’s artwork attracted widespread attention in the NFT market when the NFT craze began. He is a digital artist who makes original artworks. He once created one piece every day and continued to create it for 5000 days (more than 13 years). The works auctioned at Christie’s are collages of these 5,000 works. Beeple became a millionaire overnight. Subsequently, he began to give away his personal works through the lottery system, which would immediately make his fans thousands of dollars, and many of his works can be downloaded for free in the creative sharing. As a result, Beeple was awarded the GQ Artist of the Year Award.
In the music industry, there is a lot of news about low-paid musicians and music companies exploiting artists. NFT can also get rid of this problem and enable musicians to sell directly to their fans. The possibilities are endless. They can sell event tickets as NFT to record this event, they can release music albums as NFT, they can publish the lyrics of their tracks, only a certain number of fans can have them, they can also Meet with certain NFT holders (fans) to achieve the effect of selling NFTs.
In the world of NFT, artists can do many things to build closer relationships with their fans. This is obviously not limited to musicians, it enables people to monetize more personal brand IP.
Fragmented ownership of NFT
Some artworks are sold for millions of dollars, and it seems that ordinary people cannot participate in these markets. This is not the case. The owners of these expensive items can turn their millions of dollars worth of NFTs into fragmented ownership NFTs. They can decide how many parts they want to divide into, and then they can sell these parts as their own NFT. This means that anyone can invest in these artworks and create a community around them and maintain their value.
Play to Earn
Prop equipment in blockchain games is the most important point for large-scale adoption in the NFT field. Compared with some other uses of NFT, the basic knowledge barrier for new users is very low. These users can play in the game, and some gamers have even spent thousands of dollars on the purchase of in-game props. Although Fortnite is a free-to-play game, just the purchase of items in 2019 has made the development team $1.8 billion. Now imagine that players can own all the props and equipment they buy or unlock in the game, and if they think it is valuable, they can sell it for profit. This is a win-win situation for players and the gaming industry. Most game profits come from game sales, nothing more. Now, they can continue to make money by running the market of in-game assets, and extract a small part of the processing fee from the trading market as profit.
But at present, although these blockchain games are very basic, they have already allowed people to make a lot of money. Players can earn $50 a day by playing Axie Infinity , a game that can breed pets, fight and trade. Axie ‘s collectible NFT is the most expensive in the current chain game market, with sales of 42 million US dollars in June 2021 alone. The token price of Axie Infinity has soared from USD 3 in June 2021 to around USD 70 today, making many early gamers rich.
People in countries with low cost of living make more money playing these games than they make in normal work. This creates an opportunity to narrow the global income gap. If a player in the United States values their time more than someone in a third world country, then it takes more incentives to motivate the American player to play the game. Once American players begin to enter the game, players in third world countries are already playing, and as the game becomes more popular, the value of his assets will increase.
Meta universe (virtual world)
If you have seen the movie “Player One”, then you will understand all the contents of the virtual world. It is basically a digital world in which users can control avatars to roam around the world and interact with each other. The reason why the virtual world has not been popular until now is the issue of ownership. A virtual world without ownership does not give people enough motivation to keep coming back. Now, with the combination of ownership and social models, people are flocking to these virtual worlds.
At present, no matter which meta-universe project, most of the virtual land has been dug up, and you can only buy it on the secondary market. However, as thousands of users flood into these virtual worlds, the value of these virtual lands will only increase. The amazing thing about these virtual worlds is that this is their essence, “a world.”
You can freely control your role in these virtual worlds. You can talk to other people, you can build anything you want on your land, and you can even host virtual events and virtual meetings.
Although Metaverse is only in the conceptual stage at present, many players have already felt its unique “money-making effect” first. For example , designer Hiroto Kai who sells kimonos in the virtual world Decentraland . He made about $20,000 in three weeks, and players in the Decentraland virtual world can already wear these kimonos. Each piece of clothing is unique, they are equivalent to NFT, so it can be sold to anyone willing to pay the price.
In the world of blockchain, there are various virtual worlds, and the content covered by each world is slightly different. Currently leading the industry are Decentraland, Sandbox, Cryptovoxels and Somnium. Although they are different in terms of image quality, virtual land, number of users, and the value of in-game currency, they are similar in that you can create and interact freely in them. The cheapest virtual land I can find on the four platforms is about 1 ETH (±3300 USD).
Trust is easily broken, but blockchain is based on trust.
Generally speaking, the magic of the blockchain field is that everything is based on trust. You have your funds and you can do whatever you want. There are many competitors that provide similar services (such as DeFi), which forces them to work hard to expand innovation and actively maintain service principles. And this is precisely the driving force that promotes the entire blockchain industry towards greater innovation.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/curry-bought-an-avatar-for-1-16-million-nft-is-not-just-jpg-and-txt/
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