What is the difference between digital collections and NFTs? Are digital collections just a chess piece for giants under the alliance chain to gather and collude for profit?
Text / Yin Ning
Produced/Gyro Research Institute
Since the rise of digital collections in China in 2021, its comparison with NFTs has never stopped. From the on-chain model to data sovereignty, from hype demand to practical application, from sales form to value attribute, in various comparisons, there are endless discussions about which one is better.
Recently, rumors of the abolition of Magic Nucleus have further fermented public opinion. As an iconic platform for digital collections, Magic Nucleus has aroused thousands of waves of digital collections, and it has also caused widespread heated discussions among users of Digital Collections. Many users questioned the value of the collections after the abolition of Magic Nucleus, and further doubted the existence of digital collections based on the alliance chain. At the same time, they greatly admired the consensus of overseas NFTs. It was the last fig leaf of the Chinese version of NFT.
What is the difference between digital collections and NFTs? Are digital collections just a chess piece for giants under the alliance chain to gather and collude for profit? In the aftermath of the questioning, the two, who are like twin flowers, seem to be heading for completely different paths.
The Road to the Rise of Digital Collections: Dominated by Big Manufacturers
Although there have been sporadic sales of NFT products in China before, its official market response was in June 2021. At that time, it had not been renamed as a digital collection. The Alipay Ant Chain Fan Granule applet co-branded with the Dunhuang Art Research Institute and launched the Dunhuang Feitian and Jiuselu two Alipay payment code NFT skins are generated based on Ant Chain. Each version is limited to 8,000 copies. The initial issue price is 9.9 yuan plus 10 Alipay points. As a superimposed product of the concept of big factory + NFT + Dunhuang, NFT skin is very popular in the market, and sold out in seconds after the launch. The positive response of the market should prove the feasibility of NFT business logic, and it has also made many manufacturers smell business opportunities. In August, Tencent followed with the launch of the NFT distribution platform “Magic Core”, and released the “Thirteen Invitation”-themed NFT produced by Tencent Video, priced at 18 yuan and limited to 300 pieces. So far, with the blessing of the two giants, the NFT product transaction officially kicked off in my country.
The NFT craze ushered in its first change on October 23. On the same day, the words “NFT” disappeared and changed to “Digital Collection” on the inner pages of the Alipay applet “Ant Fan Particle” and Tencent’s NFT distribution platform “Magic Core”.With the hype of overseas NFTs, in order to avoid regulatory risks, in the self-evident tacit understanding of big manufacturers, domestic NFTs were officially renamed as digital collections.
In November, the Trusted Blockchain Promotion Plan released the “Research Report on Digital Collections Based on Blockchain”, which was compiled by Ant, Tencent, China Academy of Information and Communications Technology, QuChain, JD.com and other institutions. The report clarified the concept of digital collections , believes that blockchain-based digital collections are generated and issued based on alliance blockchain technology, and can only be owned by blockchain users who have passed real-name authentication. Non-homogeneous digital commodities with unique identifiers. The consensus of major manufacturers has begun to emerge, defining digital collections as digital commodities, which is separated from its financial attributes, but it is worth noting that the concept of collections identifies digital commodities as digital collections, which itself has investment attributes, which is also a follow-up digital The hype of the collection has buried hidden dangers.
Since then, digital collections have become more and more intense in my country, and they have begun to rapidly transfer from the Internet to the whole industry. Small and medium-sized enterprises, financial institutions, traditional listed companies and even official institutions continue to pour into it. The number of fields involved and the number of institutions involved are astonishing, setting off a digital image consumption frenzy with the theme of digital IP in the market. In terms of digital collection trading platforms, as of August 2022, the number of digital collection platforms in my country has exceeded 1,000. Since March this year, the average monthly number of new platforms has exceeded 100, and more than 30 listed companies and large institutions have launched their affiliates. There are many official organizations on the digital Tibetan platform.
From the perspective of profitability, digital collections have opened up a new round of wealth-making myths. From the perspective of the platform, the profit model of platforms that have not yet opened a secondary market is to cooperate with IP parties, while platforms that have opened a secondary market can also collect fees through secondary consignment and resale in addition to revenue sharing. Take WhaleTrack as an example. As the only digital collection platform among Internet giants that opens the function of gifting, WhaleTrack has issued more than 3.8 million digital collections by the end of April this year, with a total transaction value of 62 million yuan and more than 1 million collectors. Platforms that open secondary access are even more profitable. The largest open secondary market in China, ibox, has a daily turnover of more than 100 million yuan at its peak, and its only designated official partner in the payment terminal of its platform, Yibao Pay, only manages the monthly revenue. up to ten million. From the consumer point of view, the scarcity of digital collections has been further enhanced under the platform’s restrictions on purchases and sales. Users obtain high value-added through the exchange of digital collections, and the hype that claims to be ten-fold and hundred-fold returns abound.
By June this year, Shuzang ushered in a second change. Under the rapid growth of the platform and the slump in the secondary market, along with the change of supply and demand relationship and the decline of value recognition, the top platforms headed by Tencent and Huanhe accelerated the distribution frequency and even started to slow down. With more than 20,000 pieces, waist platforms such as Hongdong Shuzang entered a liquidity crisis, and both the volume and price of the secondary market fell.
At this time, the news of the suspected abolition of the Magic Nucleus also announced that the digital collection has officially entered the cold winter period. Although the Magic Nucleus responded that the operation is normal, its vague attitude towards the abolition or not has caused heated discussions in the market. From a deep level, Tencent’s suspected abandonment of Magic Core has brought a huge blow to the industry. As an Internet giant closely linked to supervision, it undoubtedly has a clearer understanding of the future development and trend of the industry. The rumor of its abolition this time has also caused an uproar in the digital collection market, and even questioned the current commercial closed loop of digital collections.
Looking at the entire development process of the digital collection to the present, it can be seen that from the birth of the digital collection to the bottom of the valley, the big manufacturers have played a key role in promoting the digital collection and clarifying its business model and concept. Since then, digital collections have become popular. After they were completely rejected due to regulatory uncertainty, the business logic of digital collections has been hit hard. Among them, Dachang made a lot of money while creating gods and charms, watching from afar. However, the suspected abolition of the magic core also exposed a deeper problem. Does the digital collection based on the domestic alliance chain really belong to the users themselves?
Comparison of the differences between Shuzang and NFT: big factory conspiracy or ownership butterfly effect?
With 300,000 users, Magic Core has always been the second largest head platform after WhaleTalk. According to Lianxin statistics, Magic Core has sold more than 80 million yuan since its establishment, and its monthly sales in April 2022. Even nearly 20 million yuan. Huge sales naturally mean high sales, and as a result, more users are questioning whether the digital collections that have been sold still exist if the abolition of Magic Nucleus is confirmed? And this just leads to the difference between digital collections and NFTs.
In terms of technical means, digital collections are actually not much different from NFTs. The only difference is the generation environment on the chain. The current digital collections are mainly generated by smart contracts based on the domestic alliance chain, and the consensus is mainly confirmed by the nodes on the alliance chain. For example, the digital collections on the Magic Core are mostly based on Tencent Zhixin Chain, while NFTs are built on overseas public chains. , consensus and security are maintained by the public chain itself.
At first glance, it may not seem different, but the chain environment itself has significant implications for the attribution of ownership. Whether it is Ant Chain or Zhixin Chain, the current domestic alliance chains are mostly led by large factories or powerful enterprises as super nodes for ecological construction, and other enterprises can join as nodes, but management and operation rights are mostly concentrated in leading enterprises, and more What’s more, the nodes of almost all chains are managed by one company. Strictly speaking, this environment cannot be called a consortium chain, nor is it even a blockchain in the traditional sense. It is still the back-end system of the organization in essence, and the API interface is not open. The security and sustainability of the chain are They are only controlled by a single or a few companies.
From this perspective, taking Magic Core as an example, although the departure of the Magic Core platform will not affect the digital collection itself due to the integrity of the ecological nodes on the Zhixin Chain, the digital collection is still on the chain, but due to the closure of the API interface , users may not be able to access their digital collections through external interfaces.Extending to extreme cases, the withdrawal of major factories or key nodes can even directly lead to the demise of the construction chain, and the digital collection on its chain no longer exists. For the public chain, the decentralization and openness of nodes are doomed to the decision-making of the project party. For example, after the operator of the NFT project mefers clearly ran away, since the ownership of the NFT still belongs to the individual, its spontaneous ecology still remains. operation, and continue to voice through Erchuang.
The vision turns to the user. Looking at all the current digital collection platforms, the ownership of the user’s private key is hosted by the platform, not controlled by the individual, which means that the user does not have the actual control of the digital collection, and the platform can control the individual’s private key through the private key. All data, perform all operations related to the transaction. In contrast to the NFT transaction process, the user enters through the wallet, the private key is completely controlled by the individual, and the execution of the transaction is controllable and traceable. Although the personal ownership of the private key authority reduces the convenience, the control of assets is obviously more important in the current era of digital assets. In this regard, some users joked that domestic digital collections are undoubtedly openly placing bank card passwords at others.
In addition to excluding technology, just comparing the current digital collection and the main form of digital pictures of NFT, the two are quite different. In terms of usage scenarios, the current digital collections do not actually have clear usage scenarios. Taking Whale Scout’s description of digital collections as an example, digital collections can only be applied to specific digital works on the interface of specific business scenarios. Some digital collections can be used as payment code skins, tickets, and admission tickets. Under the current situation where cultural and creative products are the main category, most digital collections are only used for viewing and speculation. Also as a digital image, NFT can communicate with social media and exist in the form of avatars, which is also the most common form of NFT. It can also be used as a community membership certificate, which has the right to govern the community, and has uses other than hype and viewing.
From the perspective of copyright, users of digital collections also have no copyright ownership. Citing the user announcement of WhaleTrack, the copyright of digital collections is owned by the publisher or the original creator, and users are not allowed to use digital collections for any commercial purposes. After the NFT is purchased, the user can own all the copyrights regarding the holding of the NFT. Here, you can purchase the boring ape for commercial activities against the Greenland, Beichuan, etc.
But does it mean that overseas NFT collections have more advantages than domestic digital collections? This is not the case. From the perspective of financial security, the anonymity and openness of overseas NFTs are naturally resistant to censorship and supervision. Not only can they fail to protect the interests of investors, but there are also hidden dangers such as illegal fundraising, money laundering, and fraud. Real-name authentication enhances compliance and controllability, and greatly reduces the risk of financial fraud and money laundering. At the same time, overseas NFTs cannot pass copyright review and face serious copyright risks, and most digital collections need to go through content review before they can be published on the chain.
In addition, overseas NFTs aim to tokenize works, focusing more on their financial use, while digital collections are gradually being applied in the direction of cultural copyright, and more emphasis is placed on their physical empowerment. It can also be seen from the price here, digital collections are generally priced Between tens to hundreds of yuan, and the high threshold pricing of NFTs at every turn has been suspected of positioning it as a financial derivative, which is divorced from the actual value attribute.
But in general, users’ concerns about the digital collections on the domestic alliance chain, or even the big factory-led alliance chain, are not groundless. The digital collections that claim to have permanent ownership and traceability are actually controlled by leading companies, etc. In the hands of Lianfang, at the same time, the use of data collection is single, and the copyright has no attribution, which also gives a foothold to the big factory data collection theory in the market. But digital collections are obviously not going to sit still.
The future trend of digital collections: going from virtual to reality and returning to the essence of technology go hand in hand
Although compared with overseas NFT products, the current digital collections have problems such as unclear ownership and poor openness and transparency, but they also have incomparable advantages such as controllable supervision and physical empowerment. However, for their shortcomings, the digital collection industry also Breakthrough is accelerating.
From the perspective of the underlying infrastructure, many manufacturers have begun to take action to promote the improvement of closed chains to an open environment from the level of co-governance. For example, Tencent Zhixin Chain, which introduced the National Industrial Information Security Development Research Center, Sichuan High People’s Court, Shenzhen Intermediate People’s Court and other institutions are the mainstay of its chain ecology.
On the other hand, in addition to the introduction of nodes through official institutions to enhance credibility, some institutions have begun to try to find another way to realize the open and transparent migration of the public chain through the optimization based on the alliance chain. On the premise, the control of a single node is reduced. The open consortium chain is a blockchain technology system based on the underlying framework of the public chain for compliance transformation to adapt to Chinese laws, regulations and regulatory requirements. At present, Ant, Baidu, BSN and other institutions have launched open consortium chain networks.
Taking the BSN-DDC network launched by BSN as an example, BSN-DDC is composed of more than ten open alliance chains, allowing qualified operators to build their own node data centers, and realize the multi-party co-governance of the chain environment through the addition of multiple nodes, thereby decentralized The risk of a single node, even in the technical direction, can satisfy the transfer of data between platforms. In response to the much-criticized private key management level, its DDC safe deposit box enables end users to manage private keys independently. At present, the PC-side DDC safe box based on the Chrome browser has been released, and the mobile-side DDC safe box will also be launched in two It will be launched within a month. If the functions of the mobile phone terminal are released, it will also lay the foundation for the protection of the ownership of the subsequent digital collections.
From the aspect of application, the current digital collections and NFTs have entered the stage of physical equity matching from the initial stage of hype and savage growth of collections, and their bubbles are reduced through the empowerment of entities. For example, Prada announced that starting from June 2, it will release a monthly The Timecapsule series of products are accompanied by NFT, which realizes the use case of combining virtual and real through the binding of physical products. At the same time, digital collections have a significant role in brand marketing, and their technical features are naturally compatible with the membership management, brand points and incentive systems involved in current brand marketing. On the one hand, the construction of consumer goods through virtualization can broaden the creative space and boundaries of brand marketing. On the other hand, digital collections build an effective way to reuse the residual value of IP, which is also in line with the mainstream values of the current Z era. In terms of the market, many well-known companies such as GUCCI, Burberry, Li Ning, Anta, Xiaopeng, etc. have begun to try to build their own brand marketing matrix through the three cycles of digital collection + Metaverse + private domain traffic.
But it is worth noting that although the digital collections and overseas NFTs are compared based on the business form above, in the final analysis, the bottom layer of NFTs is still a distributed database technology, regardless of whether it is an overseas version of NFTs or domestic digital collections, digital pictures are used as The collectibles carried are just a business application on top of them. As a representative of digital rights on the chain, the core value of NFT is that it can record and mark data objects with high multi-dimensional complexity on the chain, and realize the tracking and backtracking of data objects through marking, so it naturally has diversified applications Value, in addition to the field of collectibles, has broad scenarios in digital commodity certificates, tickets, account management, intellectual property rights and even government affairs management. In fact, many NFT technology applications other than collections have emerged. For example, China Carbon Neutral used blockchain technology to issue carbon asset NFT in March this year, supporting institutions, enterprises or individuals to purchase carbon asset NFT through the platform to offset related emissions. .
In the long run, in the highly sought-after Web3, NFT realizes the disclosure and decentralization of data ownership in the form of a single database. In the asymptotic Metaverse, any virtual item in the Metaverse can be represented by NFT. With digital convenience and exchangeability, it can bring massive market scale. From this point of view, digital collections are carried by Chinese NFT technology. In the future, technology can promote the completion of the marking of complex data, realize digital commercialization and asset digitization, and then become an important digital asset under the Metaverse boom. However, the premise of achieving this is still It is to eliminate the current status of digital collections only as hype or financial products, and truly return to the technical essence of their data carriers.
Returning to the question at the beginning of this article, which is better or worse between digital collections and NFTs? At this point, the question seems to be no longer necessary to answer. If the two are only regarded as equivalent digital pictures, they will inevitably fall into the same pattern of financial products. If the two are regarded as applications and technologies, the basis of comparison will undoubtedly be lost. But in the final analysis, application and technology complement each other, application drives technology, and the continuous circular relationship between technology optimization and application has been widely verified. For the new technology of NFT, it is still practice and users who determine its development direction.
In the future, Shuzang and NFT, whether to become a short-lived lonely hero in the hype or become the cornerstone of the all-powerful party in the Metaverse, the right to choose is already in front of you and me.
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